Trump’s China Tariff Gambit Sparks Stock Market Meltdown

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Wall Street reels after Trump vows 100% tariff and sweeping export curbs; Chinese retaliation rattles tech and energy sectors.

By S JHA

Mumbai, October 11, 2025 — The markets went into a tailspin late Friday after US President Donald Trump announced sweeping new tariffs and export controls targeting China, prompting investors to flee equities and stoking a new wave of global trade anxiety.

“After the market closed, Trump posted again, saying that the US ‘will impose a Tariff of 100% on China, over and above any Tariff that they are currently paying. Also on November 1st, we will impose Export Controls on any and all critical software,’” The Wall Street Journal reported.

The announcement sent shockwaves through Wall Street. The Nasdaq composite plunged 3.6%, while the Dow Jones Industrial Average fell 880 points, or 1.9%. The S&P 500 shed 2.7%—its steepest one-day drop since April—wiping out the week’s gains and leaving all three major indexes with losses exceeding 2%, their worst performance in months.

Trump’s rhetoric had already stirred volatility earlier in the day. “Some very strange things are happening in China! They are becoming very hostile,” he posted at 11 a.m., accusing Beijing of trying to “clog the markets” by imposing export controls on rare earths and other materials critical to global manufacturing.

The response from Beijing was swift and muscular. Chinese authorities rolled out new restrictions on rare-earth exports and slapped a special port fee on US vessels, according to The Wall Street Journal. They also launched an antimonopoly investigation into US chip giant Qualcomm, which saw its shares tumble 7.3%.

The technology sector bore the brunt of investor panic. US semiconductor stocks cratered—AMD slid 7.7%, Broadcom lost 5.9%—as fears mounted that an escalating trade war could choke supply chains and trigger new rounds of retaliatory measures.

Trump also dropped hints that he m ay not meet Chinese President Xi Jinping during his Asia trip. The US-China trade war per analysts could once more send the stock markets in a bear phase as supply chains disruptions could bring upheavals in the global economy.

Commodities moved sharply in response to the turmoil. Gold prices surged toward the $4,000-per-ounce mark as investors sought safe havens, while oil prices plunged 4%—their lowest since the weeks following Liberation Day—amid reports of Israeli troop withdrawals from Gaza and lingering fallout from the US government shutdown, now in its 10th day.

The synchronized selloff marks a return of geopolitical risk as a dominant force in markets, just as traders were beginning to price in a soft landing for the US economy.