STORY: U.S. stocks tanked on Friday after President Donald Trump rattled markets with threats against China.The Dow fell one point nine percent, the S&P 500 slid two point seven percent and Nasdaq dropped three and a half percent.In a Truth Social Post, Trump threatened a “massive” tariff increase on Chinese imports after Beijing tightened its rare earth restrictions.That was at 10:57am.The Dow experienced a steep fall off a few minutes later.Trump’s erratic trade policies have rattled markets since his April 2 “Liberation Day” tariff announcement, with on-again, off-again trade negotiations, causing turbulence across asset classes.Anna Rathbun, founder and president of Grenadilla Advisory, says investors may have to contend with uncertainty over the economic relationship with China for months to come.”I think today is a hiccup. But it does tell us that maybe negotiations are not going very well, and it may extend into 2026. Liberation Day was April 2nd, early April, right? We had kicked the can down the road earlier. It was July 9th and then August 1st, and now it seems to be indefinite, and that is a worry for the markets.” Trump later said he was raising tariffs on Chinese exports to the U.S. to 100% and imposing export controls on “any and all critical software” in response to China’s recently announced export limits on rare earth minerals.China produces over 90% of the world’s processed rare earths and rare earth magnets, which are critical for products ranging from electric vehicles and aircraft engines to military radars.Renewed tensions between the two largest global economies could trigger major supply chain disruptions.Stocks on the move included U.S.-listed shares of Chinese companies including Alibaba which plunged eight and a half percent.And Qualcomm declined seven percent after China’s market regulator said the country had launched an antitrust investigation into the semiconductor manufacturer over its acquisition of Israel’s Autotalks.
