Trump Threatens to Impose New Tariffs on China and Cancel Meeting With Xi

President Trump threatened on Friday to impose more tariffs on imports from China and cancel an upcoming meeting with the country’s leader, Xi Jinping, saying that curbs that China put out this week on its exports of rare earth minerals would “‘clog’ the Markets, and make life difficult for virtually every Country in the World.”

The president wrote on Truth Social that China’s new export restrictions, which threatened to hobble manufacturers of semiconductors and electric vehicles, were “sinister and hostile.” Mr. Trump said that he had planned to meet Mr. Xi in two weeks at an international economic conference in South Korea, “but now there seems to be no reason to do so.”

The president also threatened retaliation, saying he would “financially counter” China’s move. “One of the Policies that we are calculating at this moment is a massive increase of Tariffs on Chinese products coming into the United States of America,” he wrote. “There are many other countermeasures that are, likewise, under serious consideration.”

Markets shuddered at the developments, with the S&P 500 index sliding roughly 2 percent by Friday afternoon.

Rare earth minerals, which are vital for making an array of products including motors, brakes, semiconductors and fighter jets, have been at the center of tensions between the United States and China this year. In April, the Chinese government responded to stiff tariffs Mr. Trump had imposed on Chinese goods by clamping down on mineral exports destined for U.S. automakers and defense manufacturers.

The Trump administration tried to encourage China to back down by imposing its own restrictions on exports of chip design software, airplane engines and other products. But the curbs threatened to close U.S. factories and forced the United States, which depends on Chinese supplies, to pull back. Ultimately, officials from both countries reached a fragile truce in meetings this spring that led to Mr. Trump reducing his tariffs and Beijing approving more mineral exports.

But on Thursday, Beijing again escalated its controls, asserting broader jurisdiction over the global manufacture of semiconductors and other technology.

The Chinese government said it would require foreign companies to obtain licenses to export products containing even a minimal amount of rare earths, including for chip manufacturing. It also put new controls on technology and equipment used for extracting and refining minerals, and for making electric vehicle batteries. The rules are set to take effect Dec. 1.

China mines 70 percent of the world’s rare earths, and it also performs the chemical processing for roughly 90 percent of the global supply of such minerals. In addition to rare earths, the Chinese government has set out long-term plans in recent decades to dominate key industries, including steel, shipbuilding, robotics and biomedicine.

On Friday, China also announced an antimonopoly investigation into the American chipmaker Qualcomm and new fees for U.S. ships docking at Chinese ports.

The new restrictions have caused significant anxiety among U.S. companies. Analysts said the new limits could scramble the supply chains of some of the world’s biggest companies including Nvidia and Apple.

Tech stocks were particularly hard hit on Friday, with Nvidia down almost 2 percent, Advanced Micro Devices falling over 7 percent and the broader semiconductor sector sliding roughly 2.5 percent.

The stock market was already on edge this month, after five straight months of gains had lifted prices to record levels, prompting some investors to warn of the potential for a pullback. The drop on Friday morning remained fairly modest.

Analysts had speculated that China’s move could be Beijing’s effort to amass leverage ahead of the meeting between Mr. Trump and Mr. Xi. If so, it may have backfired. In addition to the president’s calls for retaliation, other critics of China said the measures highlighted the need for the United States to reduce its exposure to the Chinese economy.

John Moolenaar, the chairman of the House Select Committee on China, called Beijing’s action “an economic declaration of war against the United States and a slap in the face to President Trump amid his efforts to fight for a level playing field.”

Mr. Moolenaar said the United States should immediately pass legislation to end preferential trade treatment for China, build the U.S. supply of minerals and “strangle China’s technology sector with export controls instead of selling it advanced chips.”

Wendy Cutler, a senior vice president at the think tank Asia Society Policy Institute, said the president’s statements showed “how fragile the emerging détente between the two countries really is.”

“Beijing has become increasingly assertive, believing it has the upper hand in the bilateral relationship,” she said. But Mr. Trump’s counter threats showed that “two can play this game.”

With the planned summit between the leaders in just over two weeks, it was unclear whether the two sides would be willing to de-escalate in order to still hold the meeting, Ms. Cutler added.

In his social media post, Mr. Trump said that the changes “came out of nowhere.” The United States’ relationship with China over the past six months had been a very good one, he said.

The president went on to say that although China had a monopoly on rare earth minerals, the United States had other monopolies that were “stronger and more far reaching.” He added, “I have just not chosen to use them, there was never a reason for me to do so — UNTIL NOW!”

The White House has been planning a trip to Asia later this month for the president, which would include a meeting with Mr. Xi on the sidelines of the Asia-Pacific Economic Cooperation meeting in South Korea.

The plans had generated speculation about whether the meeting could lead to an economic deal between the countries, potentially including Chinese purchases of American products or Chinese investment in the United States. Beijing has also been interested in having the United States roll back the global controls it has put on China’s access to advanced A.I. chips.

American farmers have also asked the administration to push China to remove retaliatory tariffs on U.S. soybean exports that have crippled business this year. One of them, Caleb Ragland, a Kentucky soybean farmer who is the president of the American Soybean Association, said in a statement that his group was “extremely disappointed” that the planned meeting between Mr. Trump and Mr. Xi would be canceled.

“Trade wars are harmful to everyone, and these latest developments are deeply disappointing at a moment when soybean farmers are facing an ever-growing financial crisis,” Mr. Ragland said.

Joe Rennison contributed reporting from New York.