Former President Donald Trump announced Friday an additional 100% tariff on all Chinese imports beginning November 1st, accompanied by broad new export controls on critical U.S. software, in retaliation for China’s move to sharply restrict exports of rare earth minerals. The news sent U.S. markets into a tailspin, with the S&P 500 sliding over 2%—its steepest daily drop since April.

Trump described China’s actions as “extremely aggressive,” citing reports that Beijing had notified countries worldwide of impending export controls covering nearly every product made, especially those involving rare earths. China, which supplies more than 90% of the world’s processed rare earth materials and magnets, declared the controls would take effect November 1st and impact a broad swath of supply chains crucial to semiconductors, smartphones, and energy tech.

Investors responded with an exodus from risk assets, dragging all major U.S. indices into the red and battering technology and alternative energy sectors hardest. Analysts caution that the U.S.-China trade relationship appears to be headed for its tensest period in years, and that fresh supply chain shocks could drive up manufacturing costs and force companies to rethink sourcing strategies.

With both governments signaling hardline stances, markets are bracing for more turbulence ahead. The world will be watching closely to see if diplomacy resumes, or if the trade and technology standoff sparks wider market disruptions. Investors should keep alert for new policy moves and consider adapting portfolio risk strategies accordingly.