Trump threatens China with new tariffs, says there is no reason to meet with Xi National

American President Donald Trump He threatened to raise tariffs on China and cancel a planned meeting with the president Xi Jinpingin a criticism against Beijing that sent markets and relations between the world’s largest economies into a spiral on Friday.

Trump, who is scheduled to meet Xi in about three weeks in South Korea, complained on social media about what he described as China’s plans to hold the global economy hostage after China dramatically expanded rare earth export controls on Thursday.

He said there was no reason to hold the previously announced meeting with Xi. Beijing never publicly confirmed the meeting between the two leaders.

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

Trump’s unexpected criticism had an immediate impact on US stock prices, with the S&P 500 falling 2 percent following his social media post. These statements sent investors to the safe haven of US Treasury bonds, which led to lower returns on those assets, as well as on gold. The US dollar fell against a basket of foreign currencies.

Trump said in his blog post that China is sending messages to countries around the world saying that it plans to impose export controls on every element of production related to rare earth elements.

“Based on what China says about the hostile ‘order’ they just issued, I, as President of the United States of America, will have to financially confront their move,” Trump said on Truth Social. “For every element they manage to monopolize, we have two.”

“I was supposed to meet President Xi in two weeks, at the Asia-Pacific Economic Cooperation (APEC) forum in South Korea, but now there seems to be no reason to do so,” he added.

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

A US Trade Representative spokesman declined to comment, while a US Treasury Department spokesman did not immediately respond to a request for comment. The two offices led talks with Beijing on trade.

China’s move on Thursday included adding five new items, additional scrutiny of semiconductor users and adding dozens of pieces of refining technology to a restricted export control list. It also requires foreign rare earth producers using Chinese materials to abide by its rules.

China produces more than 90 percent of the world’s rare earth elements and rare earth magnets. The 17 rare earth elements are vital materials in products ranging from electric cars to aircraft engines and military radars.