U.S. President Donald Trump has once again rattled the global economy with the announcement of new trade measures against China. Just a few months after Washington and Beijing attempted to stabilize relations, Trump announced that starting next month, the United States will impose an additional 100% tariff on Chinese goods, along with stricter controls on the export of American software.
His statement triggered a chain reaction — from stock market drops to a historic shock on the crypto market, where more than $7.5 billion disappeared in just one hour.
Trump accuses Beijing of “holding the world hostage”
On the social network Truth Social, President Trump accused China of becoming “very hostile” and attempting to “hold the world hostage” through its control of rare metals and raw materials essential for global technology.
His reaction came shortly after Beijing tightened rules for exporting rare earth metals, key for the production of cars, phones, and chips. Trump threatened to cancel his planned meeting with Chinese President Xi Jinping but later said he was “not sure the meeting will take place at all.”
“I’ll be there regardless,” he told reporters at the White House, stressing that “the U.S. will no longer tolerate China’s market manipulations.”
Panic on Wall Street and crypto crash
Trump’s words immediately affected financial markets. The Dow Jones fell by 1.9%, the S&P 500 by 2.7%, and the Nasdaq lost 3.5% of its value — marking its steepest daily decline since April.
The crypto market reacted even more violently: within 60 minutes, investors lost more than $7.5 billion. The biggest losses were recorded in Bitcoin (down $1.83 billion), Ethereum ($1.68 billion), and Solana ($614 million).
According to the Coinglass platform, over the past 24 hours, more than $9 billion in positions were liquidated, and as many as 1.4 million investors were forced to close their trading accounts.
Analysts from Valuermarket described the event as “the largest single-day liquidation in the history of digital assets.” Bitcoin’s price fell from $122,000 to $105,000 — one of the steepest drops in its recent history.
The U.S. economy depends on China
Although Trump is trying to portray China as the main adversary, the economic interdependence between the two nations remains immense. The United States still depends on Chinese goods worth hundreds of billions of dollars, including electronics, clothing, and furniture.
For years, the president has urged American companies, especially in the tech sector, to bring production back to the U.S., but many have opted for a compromise: investing in domestic factories while keeping most of their production abroad.
In April, Trump imposed tariffs of 145% on Chinese goods but soon exempted electronic products, reducing the tariff to 20% — a move many economists interpreted as an acknowledgment that overly harsh tariffs could seriously harm the U.S. economy.
Temporary truce turns into a new trade war
In May, U.S. and Chinese officials tried to ease tensions — agreeing on mutual tariff reductions. China cut taxes on American exports from 125% to 10%, while the U.S. reduced its tariffs from 145% to 30%.
That deal briefly calmed markets, and both countries’ stock exchanges rose. However, Trump’s new announcement effectively erases that temporary truce and returns the world to the atmosphere of a trade war.
“This is a return of economic nationalism in its purest form,” analysts from the Financial Times assessed. “Trump is using tariffs as a weapon — not only against China but against global dependence on Chinese production.”
Markets await the next move
Trump’s administration insists that the new tariffs will “protect American workers and restore domestic manufacturing.” However, markets remain fearful of a domino effect. If Beijing retaliates with countermeasures, the consequences could be felt worldwide — from Silicon Valley to the Shanghai Stock Exchange.
Investors remain cautious, and many analysts warn that Trump’s trade decisions, combined with crypto market instability, could mark the beginning of a new wave of global financial uncertainty.
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