NEW YORK— In a throwback to 2019’s tariff skirmishes, President Donald Trump announced an extra 100% tariff on all Chinese imports, starting 1 November or earlier if Beijing retaliates. The post, shared on Truth Social and framed as a reply to China’s “hostile” rare earths export curbs, sent markets into a tailspin.
Crypto, stretched near highs, suffered a sharp flash crash that wiped nearly $200 billion from market value overnight. Global stocks slid, with trillions knocked off, while gold, the classic haven, shot past $4,000 an ounce for the first time as investors rushed for safety.
Bitcoin fell 12% within hours , dropping from around $122,000 to $101,000 on Binance, before bouncing to $113,000 by Saturday midday. Ethereum sank 16% below $3,700. Altcoins such as Solana and XRP slumped 20% to 30% as panic selling spread.
The washout triggered $9.4 billion in liquidations across centralised exchanges, with $7.15 billion from long positions, CoinGlass reported.
It was the biggest one-day wipe since April’s “Liberation Day” tariff shock nearly derailed the rally. “This is not a routine dip, it is a liquidity nuke,” said Ravi Doshi, co-head of markets at FalconX. “Trump’s post killed any hope of a thaw with Xi, and crypto, now tied closely to macro risk, got hit hard.”
The damage did not stop at crypto . The tariff move, stacking on top of existing 30% duties to form an effective 130% barrier on Chinese goods, shook supply chains tied to semiconductors, AI hardware, and blockchain infrastructure. China controls much of the rare earths output, so the pressure is acute.
Dow Jones Industrial Average
Beijing’s Thursday plan to require export licences for rare earths above a 0.1% concentration in foreign-made products had already spooked traders. The White House reply, including talk of controls on “any and all critical software,” raised the stakes.
Spot and derivatives volumes climbed 7.58% to $9.72 trillion after August’s tensions, then surged to $333.8 billion on Friday as traders ran from risk. Open interest, up 4.92% to $187 billion before the plunge, now sits at the edge of a broad deleveraging.
Wall Street handled the shock with grim speed. The Dow Jones Industrial Average sank 879 points, or 1.9%, to 45,873.63, the worst session since the spring embargo scare. The S&P 500 fell 2.71%, its steepest decline since April. The Nasdaq dropped 3.56%, dragging Nvidia and AMD down 5% to 8% on chip supply worries.
Crypto-linked stocks slid as well. Coinbase fell 12%, MicroStrategy 10%, and Robinhood 8%, echoing the crypto sell-off. “Tariff anxiety is back at fever pitch,” said Tim Quinlan, economist at Wells Fargo. “With effective rates on some items reaching 145% if exemptions do not apply, this looks like an embargo rerun. Consumer electronics may get relief again, but recession risk is now in the price.”
Gold shone in the turmoil. Spot rose 1.02% to $4,015.59 per troy ounce on Friday, after touching above $4,006 intraday. It is a record and the strongest yearly run since the 1970s. Up more than 51% in 2025, gold’s climb reflects a classic flight to safety, with inflation still above the Fed’s 2% goal, a possible US government shutdown, and a fresh trade fight.
Gold Still in Demand
Central banks, led by China, have added over 1,000 tonnes this year. Retail buyers are piling into ETFs like SPDR Gold Shares, where inflows jumped 15% after the announcement. “Gold is more than a hedge, it is the anti-fragile anchor in a world of policy roulette,” said Ray Dalio of Bridgewater, who last week urged a 15% allocation to the metal.
Forecasts from LongForecast now point to $4,327 by year’s end, as political rifts from France to Japan lift demand.
The wider hit to the economy could be severe. US imports from China fell 19% to $194 billion in the first seven months of 2025, and could fall near zero without carve-outs. The Tax Foundation has estimated a $1,300 annual cost per household from earlier tariffs.
This step could double that burden, adding to inflation and squeezing spending. Tech supply chains rely on China for about 80% of rare earths. Shortages threaten EVs, renewables, and crypto mining gear. Hashrate could drop 20% if hardware supply thins.
Sentiment on X was raw. “Covid-level nukes,” one trader wrote, as posts tracked the $7 billion liquidation wave. Some saw a setup for buyers. “Stress test passed, $110K holds as support,” one analyst posted, pointing to ETF inflows that helped keep Bitcoin up 30% year to date. The path is unclear, though. Trump’s summit with Xi is off, and Beijing may strike back with bans on US soy or Boeing orders.
Fed minutes on Wednesday hinted at more rate cuts in 2025 to cushion the blow. The committee is split, which highlights the risk. Cut too soon, and inflation could flare. Wait too long, and growth could stall. Markets must now absorb a tariff shock of rare scale.
In Trump’s America, trade policy is not a whisper; it is a sledgehammer. Whether this is the end of the bull run or a short-lived jolt hangs on de-escalation. For now, gold’s shine offers cold comfort.
