Asian markets sink after Trump threatens new tariffs on China

Trump’s remarks came after Beijing tightened control over rare earth exports - critical minerals used in electronics, automobiles and semiconductors - in a move widely viewed as retaliation for U.S. export restrictions introduced in late September. “China is taking a hostile stance,” Trump said Friday, pledging to impose an additional 100% tariff on Chinese goods starting November 1.

The announcement sent shockwaves through regional markets. Hong Kong’s Hang Seng Index fell 2.4%, China’s Shanghai Composite dropped 1.6%, South Korea’s KOSPI lost 1.5%, Taiwan’s TAIEX slid 2.3%, and Australia’s S&P/ASX 200 declined 0.5%. The Tokyo Stock Exchange was closed for a public holiday.

If enacted, the new tariffs would raise total U.S. duties on Chinese imports to roughly 130%, approaching the 145% peak reached during the spring’s trade standoff. U.S. stocks also slumped Friday, with the S&P 500 and Nasdaq recording their worst day since April.

Beijing vowed countermeasures, saying China “is not afraid of a trade war” but called for continued dialogue. Its commerce ministry defended the rare-earth measures as “legitimate and necessary,” accusing Washington of escalating tensions.

In a post on Truth Social, Trump later struck a softer tone, saying the U.S. “wants to help China, not hurt it.” “Don’t worry about China - it will be all fine!” he wrote.

Earlier, it was reported that during a meeting with Finnish President Alexander Stubb at the White House, U.S. President Donald Trump reignited tensions with Spain, accusing Madrid of failing to meet his proposed target for increased NATO defense spending.