Trump Threatens to Pull Out of Planned Xi Meeting Amid Escalating Trade Tensions
President Donald Trump has threatened to cancel a planned meeting with Chinese President Xi Jinping after Beijing tightened its rules for exports of rare earths, sparking fears of further escalation in trade tensions between the two economic giants.
In a post on social media, Trump accused China of "becoming very hostile" and trying to hold the world "captive," stating that he now saw "no reason" to meet with Xi later this month. The move has sent shockwaves through financial markets, with the S&P 500 index down 1.8% in mid-afternoon trade in New York.
The tightening of export controls on rare earths, a crucial material for high-tech industries, has raised concerns among US companies reliant on these materials. Carmaker Ford was forced to temporarily pause production after Beijing's previous move to tighten export controls earlier this year.
"This is a classic case of tit-for-tat," said David French, chief economist at the National Retail Federation. "China is trying to send a message that it will not be pushed around in trade negotiations."
The US has imposed tariffs on Chinese goods worth billions of dollars, and China has retaliated with its own set of tariffs. The escalating tensions have raised fears about the impact on global economic growth.
"Trade tensions are already weighing heavily on business confidence, and this latest development is likely to exacerbate the situation," said Michael Pearce, senior economist at Capital Economics.
The planned meeting between Trump and Xi was expected to take place later this month in China. However, with Trump's threat to pull out of the meeting, it remains uncertain whether the two leaders will still meet as scheduled.
Background: The US-China trade tensions have been escalating for months, with both countries imposing tariffs on each other's goods. In June, Trump raised tariffs on Chinese goods worth $200 billion, prompting China to retaliate with its own set of tariffs.
In a statement, the White House said that Trump was "considering" pulling out of the meeting but did not confirm whether he would still attend.
The move has sent shockwaves through financial markets, with investors worried about the potential impact on global economic growth. The S&P 500 index has been volatile in recent days, and the latest development is likely to add to the uncertainty.
As trade tensions continue to escalate, businesses are bracing themselves for further disruptions. "We're seeing a lot of uncertainty among our clients, and this latest development is only adding to that," said one industry expert.
The next developments will be closely watched by investors and policymakers alike as they try to navigate the complex web of trade relationships between the two economic giants.
Market Analysis:
The S&P 500 index was down 1.8% in mid-afternoon trade in New York.
The Dow Jones Industrial Average was down 2.5%.
The Nasdaq Composite Index was down 3.2%.
Economic Impact:
Trade tensions are already weighing heavily on business confidence, and this latest development is likely to exacerbate the situation.
The US-China trade war has already had a significant impact on global economic growth.
Practical Business Insights:
Companies reliant on rare earths should be prepared for potential disruptions in supply chains.
Businesses operating in China should be aware of the changing regulatory environment and its potential impact on their operations.
*Reporting by Bbc.*
