China Hits Back at Trump’s Tariffs with Rare Earth Restrictions — Wipes Over $500M from Crypto Market
China has tightened export controls on uncommon earth magnets, escalating tensions with Washington and triggering widespread turbulence throughout international markets, together with a $7 billion sell-off in cryptocurrencies.
The transfer, seen as direct retaliation in opposition to President Donald Trump’s newly introduced 100% tariffs on Chinese items, has reignited fears of a full-scale commerce warfare between the world’s two largest economies.
Over 1.66 million crypto merchants have been liquidated because the market skilled a pointy downturn, wiping out $19.33 billion in positions.#Trump #Bitcoinhttps://t.co/7PNRagvFrx
— Cryptonews.com (@cryptonews) October 11, 2025
Following the announcement, over 1.66 million traders were wiped out in 24 hours, leading to $19.33 billion in liquidated positions. Bitcoin and Ethereum alone accounted for almost $10 billion of these losses, making it one of many yr’s most extreme deleveraging occasions.
Additionally, the Crypto Fear & Greed Index plunged from a “Greed” stage of 64 on Friday to 27 (“Fear”) on Saturday, its lowest in six months.
Rare Earth Exports Fall 31% as Beijing Tightens Controls
The newest measures develop Beijing’s present restrictions to 5 further uncommon earth parts, together with holmium and erbium, requiring export approval for any product containing greater than 0.1% of Chinese-sourced uncommon earths.
These supplies are important to industries ranging from electrical autos and wind generators to superior protection methods.
With China controlling greater than 90% of world uncommon earth processing capability, the brand new coverage has raised issues over potential provide chain disruptions and mounting manufacturing prices worldwide.
Sources acquainted with the matter stated Chinese magnet producers have been going through tighter scrutiny on export license purposes since September. Approval processes have lengthened, with purposes more and more returned for extra documentation.
Though nonetheless throughout the Commerce Ministry’s 45-day window, the overview course of now resembles that of April, when export delays brought on magnet shortages and non permanent shutdowns at a number of automotive vegetation.
Data launched Monday showed China’s uncommon earth exports plunged 31% in September, suggesting that the slowdown had already begun earlier than the newest spherical of restrictions.
Beijing’s Ministry of Commerce has defended the controls, calling them “authentic actions” supposed to refine China’s export administration system.
“China has constantly and resolutely safeguarded its personal nationwide safety,” a spokesperson stated, including that the measures align with worldwide requirements.
President Trump, nevertheless, responded on Friday with a social media put up promising a 100% tariff on all Chinese imports, accusing Beijing of “terribly aggressive” export ways. He additionally warned of potential U.S. export bans on vital software program starting November 1.
The trade rattled markets and solid doubt on a possible assembly between Trump and Chinese President Xi Jinping later this month.
China fired again on Tuesday, vowing to “combat to the top” if the U.S. escalates. “The United States can’t concurrently search dialogue whereas threatening new restrictive measures,” China’s commerce ministry stated in a press release.
Trump appeared to melt his stance on Sunday, posting that “it is going to all be positive,” calling Xi “extremely revered,” and saying the U.S. needed to “assist, not harm” China.
Crypto Market Sinks $7B as China Tightens Rare Earth Controls
The timing of Beijing’s transfer has additionally raised issues throughout the crypto mining sector. Rare earths are very important for GPU and ASIC chip manufacturing, that means tighter Chinese export critiques may improve {hardware} prices and probably influence mining issue and community hash charges within the quick time period.
The Federal Reserve’s subsequent strikes may additional sway sentiment. Fed Chair Jerome Powell is set to speak Tuesday at the NABE Annual Meeting in Philadelphia, the place traders count on readability on rate-cut prospects.
Fed Chair Jerome Powell’s speech tomorrow may set off a crypto market crash as merchants await steering on rates of interest and financial coverage amid U.S.-China commerce tensions. #CryptoMarket #Powell #FederalReserve https://t.co/uYtW13jgYK
— Cryptonews.com (@cryptonews) October 13, 2025
Analysts say any hawkish tone may deepen the market downturn, whereas indicators of coverage easing could stabilize danger property
Despite the temporary conciliatory tone, markets remained unstable. Wall Street suffered losses, with U.S. tech shares falling over 2%, whereas international commodities rallied as traders shifted to protected havens. Gold surged to a file $4,200 per ounce, and silver climbed to $51.70.
The crypto market bore the sharpest influence. Over $500M in leveraged positions were liquidated inside hours of China’s announcement, as merchants rushed to de-risk amid the mounting geopolitical uncertainty.
Bitcoin plunged 3.1% to round $113,600 earlier than briefly dipping beneath $111,700. Ethereum fell 5.1%, buying and selling beneath $4,000 for the primary time in weeks.
XRP and Dogecoin every crashed by greater than 30%, marking one of many steepest single-day declines this yr.
The broader crypto market capitalization dropped 3.2% to $3.8 trillion.
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