Key Points

The move reignited fears of a renewed trade war between the world's two largest economies.

At the Friday closing, the Nasdaq plunged 3.56 per cent, the Dow Jones lost 878.82 points, and the S&P 500 declined 2.71 per cent.

The Dow Jones closed at 45,479.60, down 878.82 points or 1.90 per cent. The S&P 500 settled at 6,552.51, down 182.60 points or 2.71 per cent, while the Nasdaq ended at 22,204.43, slipping 820.20 points or 3.56 per cent.

More than USD 1.5 trillion in market value was wiped out from the US stock market, while the cryptocurrency market saw USD 19 billion in liquidations, the biggest single-day figure ever recorded.

The sell-off reflected investors' anxiety over escalating tensions between Washington and Beijing and the potential global economic fallout.

President Trump, in a post on Truth Social, said the new tariffs will take effect on November 1, 2025. "Based on the fact that China has taken this unprecedented position, and speaking only for the USA, and not other Nations who were similarly threatened, starting November 1, 2025 (or sooner, depending on any further actions or changes taken by China), the United States of America will impose a Tariff of 100 per cent on China, over and above any Tariff that they are currently paying. Also on November 1, we will impose Export Controls on any and all critical software," Trump stated.

The announcement came after the US President accused China of taking "an extraordinarily aggressive position on trade" by sending "an extremely hostile letter to the world."

Earlier on Friday, Trump had said there was "no reason to meet" with Chinese President Xi Jinping after Beijing imposed sweeping new export controls on rare earth elements.

He had warned that the US was preparing to respond with strong countermeasures, including a "massive increase of tariffs" on Chinese goods.

China, which dominates global processing of rare earths used in products such as smartphones, electric vehicles, and fighter jets, expanded its list of restricted minerals.

It added five new elements, holmium, erbium, thulium, europium, and ytterbium, bringing the total to 12 out of 17 rare earth types.

Export licences will now be required not only for the elements but also for technologies related to mining, smelting, and magnet production.

The developments mark a sharp escalation in US-China trade tensions and have raised concerns about the impact on global supply chains and technology industries.

- ANI