Trump Tariff Threats Ignite U.S.-China Trade Tensions

U.S. President Donald Trump issued a dramatic warning on Friday by threatening to escalate tariffs on Chinese imports and cancel an imminent meeting with China's President Xi Jinping. The announcement follows China's move to tighten rare earth export controls, leading to turmoil in financial markets.

China, holding a dominant position in the global rare earth market essential for technology manufacturing, instituted these controls on Thursday. Trump's remarks signal a significant breach in U.S.-China relations, raising concerns about the stability of the economic détente previously reached between the two countries.

Financial markets reacted sharply, with the S&P 500 Index experiencing its largest single-day drop since April. As investors sought safer assets, gold and U.S. Treasury securities surged. This latest development complicates the planned discussions between Trump and Xi at the upcoming APEC forum in South Korea.

(With inputs from agencies.)