(MENAFN- Daily News Egypt) US President Donald Trump has announced that the United States will impose an additional 100% tariff on all imports from China starting 1 November, a dramatic escalation of the trade war that sent global markets into a tailspin on Friday.

In a post on his Truth Social platform, Trump said the measures, which will be applied on top of existing duties and will also include restrictions on the export of“all vital software,” were a response to what he described as a“remarkably aggressive” stance taken by China in international trade.

He accused Beijing of sending a“severely hostile message to the world” by announcing its own sweeping export restrictions on nearly every product it makes.

“It has just been determined that China has taken a remarkably aggressive position on trade,” Trump wrote.“This is an action without precedent in the history of international trade, and a moral stain on the handling of other countries.”

“Because of this unprecedented position taken by China,” he continued,“the United States will, effective November 1, 2025 (or sooner, if any further actions or changes are made by China), be instituting a 100% Tariff on China, to be added to any Tariff that is currently in place. The United States will also, on that date, be instituting export controls on all vital software.”

“It is hard to believe that China would have taken such an action, but they have, and the rest will be history!” Trump's post concluded.

Planned Xi meeting cancelled

Earlier on Friday, Trump said there was no longer any reason to meet with his Chinese counterpart, Xi Jinping, as had been planned in two weeks in South Korea. He cited China's recent moves to impose comprehensive controls on the export of rare earth metals and related technologies, which are set to begin in December.“China has become increasingly hostile,” he said.

The US move appears to be a direct response to China's new rules, which will require foreign companies to get Beijing's approval to export magnets containing even trace amounts of Chinese-sourced rare earths. The measure effectively creates a Chinese version of the US“foreign direct product rule,” which Washington has used to block semiconductor exports to China from third countries.

China's commerce ministry said its new measures were intended to“protect its national security and interests.” A White House official told the Financial Times that the US government was“closely evaluating any impact of the new rules” and that Beijing's move appeared to be“an attempt to assert its control over the world's entire technology supply chains.”

Markets plunge on trade war fears

The announcement sent a shockwave through global markets, erasing recent gains and reigniting fears of a deepening trade war between the world's two largest economies.

US stocks plunged, with the S&P 500 falling 2.7% in its sharpest daily loss since April, while the tech-heavy Nasdaq 100 slid 3.5%. Investors rushed to safe-haven assets, with the yield on 10-year Treasury bonds dropping 11 basis points to 4.03%.

The cryptocurrency market was also hit hard, erasing more than $6bn in leveraged positions within an hour of Trump's announcement. Bitcoin, the largest cryptocurrency, fell more than 12% before paring some losses, while smaller tokens such as Ether, Ripple and Dogecoin dropped even more sharply. According to data from Coinglass, more than $7.3bn in crypto bets were liquidated in 24 hours.

Commodity prices from copper to soybeans also fell, while oil prices extended their decline. Brent crude futures for December delivery fell 3.8% to $62.73 a barrel, and US West Texas Intermediate crude for November delivery dropped 4.2% to $58.90.

The market turmoil came after a period of significant buying across asset classes. A note from Bank of America, cited by Bloomberg, indicated that global equity funds had attracted $20 billion in the week ending 8 October, while bond funds saw inflows of $25.6bn, suggesting investors had been optimistic before Trump's announcement shattered market sentiment.

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