Commodities like crude oil and copper fell sharply, each dropping more than 3% on Friday, after former U.S. President Donald Trump issued a strong statement against China, accusing Beijing of hostile trade practices following its move to tighten export controls on critical rare-earth metals. Later yesterday night, Trump intensified his stance and announced that a 100 percent tariff on top of existing duties would be imposed on all Chinese goods starting November 1, 2025, or sooner if China retaliates further. Treasury yields and the dollar index also declined following his remarks, reflecting market concerns over rising trade tensions and potential economic fallout.
This market reaction follows China’s announcement on Thursday, October 9, 2025, that it would tighten export controls on critical rare-earth metals, adding five new elements, holmium, erbium, thulium, europium, and ytterbium, to the seven previously restricted in April. Effective December 1, 2025, these controls require foreign companies to obtain special approvals from Beijing to export rare-earth magnets and certain semiconductor materials containing at least 0.1% heavy rare-earth metals, further escalating global trade tensions.
In response to these developments, former President Donald J. Trump issued two statements on Truth Social, outlining an escalating trade conflict with China. In his first post, he described China’s actions as “very hostile,” claiming the country was sending letters globally to impose export controls on various products, including rare earths, even if not manufactured in China, and characterized this as a calculated, monopolistic move. In a follow up statement, Trump cited this unprecedented situation and announced that the U.S. would respond with a 100 percent tariff on Chinese goods, in addition to existing duties, along with export controls on all critical software, both effective November 1, 2025. He described these measures as necessary to counter China’s actions financially, calling the threat a “moral disgrace” and a violation of international trade norms.
Also Read: Global Copper Market Tightens: Supply Shocks Outweigh Sluggish Demand
Earlier this year, markets experienced significant turbulence due to escalating U.S.-China trade tensions. On April 2, 2025, President Trump announced "Liberation Day," imposing a universal 10% tariff on imports from all countries, effective April 5. Subsequently, he implemented additional country specific tariffs, including a 145% total tariff on Chinese goods. This escalation led to sharp declines in crude oil and copper prices and a weakening of the dollar index. In response to the market turmoil, the U.S. and China agreed to a 90-day pause in August, reducing tariffs to 30% on Chinese imports and 10% on U.S. goods. This truce has been extended twice, most recently during talks between U.S. and Chinese officials in Spain last month.
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