China's Tit-for-Tat Export Controls Elicit Grump from White House
By Reuters | 10 Oct, 2025

Trump explodes with heated threats of "massive" increase in tariffs on Chinese imports and calling off planned meeting with Xi in Seoul.

U.S. President Donald Trump on Friday said he is calculating a massive increase in tariffs on Chinese imports, adding there was no reason to meet with President Xi JinPing in two weeks as planned, triggering a sell-off in the dollar. 

China this week has tightened restrictions on exports of key rare earth materials and, separately, on Friday said it would impose extra port fees on U.S. ships from October 14.

MARKET REACTION:

STOCKS: US stocks fell sharply and the S&P 500 was last down 1.2% while the Nasdaq was last off 2.1% 

BONDS: U.S. Treasury yields fell, with the yield on the benchmark U.S. 10-year note last down 8.3 basis points at 4.065%.

FOREX: The dollar index dropped 0.5% to 98.91.

COMMENTS: 

GENE GOLDMAN, CHIEF INVESTMENT OFFICER AT CETERA INVESTMENT MANAGEMENT, EL SEGUNDO, CA:

"The news is a surprise because just in two weeks President Trump was going to meet Xi to talk about trade and markets were very optimistic.” 

"The markets were fine this morning but with Trump saying that he's going to massively increase tariffs on China and that he's also not going to do the meeting in Korea that was supposed to take place with Xi in two weeks, this makes the markets jittery. It adds an additional risk."

"With equities at high valuations this sell-off, is a sign of jitters. Everything is priced for perfection so the uncertainty increases market jitters. All of this adds uncertainty to economic growth. That's why we're seeing treasury yields fall. Oil is selling off too. Anything tied to the economy is weakening." 

JUAN PEREZ, DIRECTOR OF TRADING, MONEX USA, WASHINGTON:

“It sends a message of negativity. What markets, for the most part, and investors need is a little bit clearer guidance, especially when trying to figure out if the Federal Reserve is going to deliver what they want, which is 50 basis points slashed off the interest rate for the remainder of the year.”

“It brings, once again, to the table and to the spotlight that the United States is acting unilaterally to try to align trade and to try to get countries to align with trade. So ultimately, it does create a lot of negativity for the U.S. economy. It creates doubt about, where is this all going? What is the purpose? Is China really going to have to be very retaliatory moving forward in order to get the United States to negotiate better? So it creates a lot of doubt.”

CHRIS SCICLUNA, HEAD OF RESEARCH, DAIWA CAPITAL MARKETS, LONDON:

“It’s difficult to know how to respond to this (the Trump comments). The temptation, given what’s happened since the start of the year and the resilience of markets, is to fade these announcements and take this with a pinch of salt what he’s saying. We’ll have to see what the substance is.”

BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN:

"It’s fuel on the fire. For a while it looked like things were going well between Trump and Xi, but China’s latest export controls on rare earth minerals set Trump off. A lot can happen between now and the APEC summit where they were supposed to meet, so it wouldn’t be surprising to see tempers cool before then.

STEVE SOSNICK, CHIEF MARKET ANALYST, INTERACTIVE BROKERS, CONNECTICUT:

"The president's comments are not are obviously not helpful for the market. We finally got through the worst of the tariff concerns and now we find ourselves once again faced with another round of them and the tone of his comments was certainly quite aggressive - massive tariffs being threatened and no reason to talk to him (Xi). So this is definitely going in the wrong direction about U.S. China trade relations. It's definitely not a market friendly move and considering how quickly the market is selling off on this."

ROBERT PAVLIK, SENIOR PORTFOLIO MANAGER, DAKOTA WEALTH, CONNECTICUT:

"He's (Trump's) caught the market off guard again and thrown more question marks into a market that is being questioned about a very high degree of enthusiasm and being sort of scrutinized for having too much fluff built into it. Then Trump comes out with this surprise announcement, so you have a market that hit an air pocket and is selling off a little bit. When you reacted to it in the past, it's come back and burned you. Do you sell out of this market because of this? It's a giant question mark. It just creates more questions and volatility in the market."

MIKE BROWN, SENIOR RESEARCH STRATEGIST,  PEPPERSTONE, LONDON:

"It’s a bolt from the blue from Trump and after the rare earth news earlier ... the timing is a big surprise. I would say as always with Trump and I think the market has learned this now, it’s difficult to determine what is the bluster and rhetoric and what he might follow through on.

The key thing market participants will be focused on as we move into the weekend and next week, is: are we now looking at having to tear up the assumptions we did have that trade was a done deal and now look at a re-escalation of tensions between the two.

If we are, and talks are in jeopardy, you are looking at a fairly chunky leg lower in risk in the days and weeks ahead."

(Reporting by EMEA, New York Markets Teams; Compiled by Amanda Cooper; Editing by Dhara Ranasinghe)