Trump says no reason to meet Xi, threatens China tariffs in new rift

Washington: US President Donald Trump has threatened Beijing to raise tariffs against China and cancel a planned meeting with President Xi Jinping, sending markets and relations between the world’s largest economies into a spiral.

Trump, who will meet Xi in South Korea in about three weeks, complained on social media about China’s plans to hold the global economy hostage after China significantly expanded rare earth export controls on Thursday.

He said there was no need to hold the meeting with Xi that he had previously announced. Beijing has never publicly confirmed the meeting between the leaders.

Trump also threatened a “massive” increase in tariffs on US imports from China. The move could reignite a destabilizing tit-for-tat trade war that Washington and Beijing paused for painstaking diplomacy earlier this year.

Trump’s unexpectedly broad direction had an immediate impact on US stock prices, with the benchmark S&P 500 Index falling 2 percent following his social media post. These statements directed investors to the safe haven of US Treasury bonds, reducing the yields of these assets as well as the yields of gold. The US dollar weakened against a number of foreign currencies.

Trump said in his post that China has sent letters to countries around the world stating that it plans to impose export controls on every element of production related to rare earths.

“Depending on what China says about the hostile ‘order’ they just laid out, as President of the United States, I will have to financially oppose their move,” Trump told Truth Social. “For every Element they can monopolize, we have two.”

He added: “I was due to meet President Xi at APEC in South Korea in two weeks, but there seems to be no reason to do so now.”

The White House and the Chinese embassy in Washington did not immediately respond to a request for comment.