Markets shaken by US-China trade tensions

US-China trade tensions escalate again

A hot development that is attracting the attention of the whole world is that after a period of calm, the two largest economies in the world, the US and China, suddenly returned to a trade confrontation last weekend.

Both countries have launched a series of moves to escalate tensions, which could have a strong impact on global economic activities. The most notable was US President Donald Trump's tough statement on social media, in which he announced that he would impose tariffs of up to 100% on imported goods from China, in addition to all tariffs that Chinese goods are currently facing. In addition, Mr. Trump also said that he would impose export controls on China on all types of essential software. These measures will take effect from November 1.

The US President’s moves are believed to be a response to China’s tightening of controls on rare earth exports on October 9. According to the country’s announcement, all items containing 0.1% or more of Chinese-origin rare earth materials, or using Chinese rare earth-related technology, must apply for an export license from December 1. The scope of this control policy can include many important technology items today, such as high-performance memory chips, processors for artificial intelligence, electric vehicles and rechargeable batteries.

Another move by China that has also caused many concerns is the imposition of special port fees on ships owned or operated by American businesses, organizations and individuals. This measure is in retaliation for the US port fees on Chinese ships that were announced earlier and will also be applied from October 14 - the time the US port fees take effect.

Markets shaken by US-China trade tensions

These developments have increased concerns in the international financial markets. US stocks, which had peaked at the beginning of the week, immediately plunged and ended the week in the red.

At the end of the trading session on October 10, the Dow Jones Industrial Average fell nearly 900 points, while the S&P 500 and Nasdaq also had their biggest drop since April 10 - with more than $2,000 billion in market capitalization "evaporated" from the market. Overall, for the week, all three major Wall Street indexes fell more than 2%, marking the biggest weekly decline in months. European stocks were also negatively affected, with most major markets falling, pushing the region's STOXX 600 index down 1.25%.

The uncertainty also spread to the crypto asset market, causing digital currencies such as Bitcoin, Ether, Solana to be heavily impacted by forced sell-offs with a total value of up to 18.28 billion USD in just 24 hours. Data analysis platform CoinGlass said this was the largest sell-off event in the history of digital currencies.

Escalating tensions challenge negotiation prospects

With the latest tense developments between the US and China, the prospects for the upcoming trade negotiations between the two countries are also a big question mark. Experts as well as the market are closely following the moves from both sides on this issue.

In a social media announcement, along with the 100% tax rate, US President Donald Trump also said he had "no reason" to continue meeting with Chinese President Xi Jinping at the APEC Summit later this month in South Korea.

However, at a press conference at the White House, Mr. Trump said that he had not canceled the meeting and that he would wait for further developments before the new tariffs take effect from November 1. The US President also left open the possibility of imposing additional export restrictions on China related to Boeing aircraft components.

China also responded quickly. According to the Chinese Ministry of Commerce, since the high-level talks in Madrid in mid-September, the US has taken many new restrictive measures against Chinese businesses, such as increasing port fees and expanding the list of trade restrictions, which have harmed the country's interests and weakened the prospects for negotiations.

Chinese officials also defended the measures they announced, asserting that the new requirements for rare earth material exports "are not an export ban" and will have only a minor impact on the global rare earth market.

According to experts, the statements of both sides are quite tough, but still leave open the possibility of solutions to reduce tensions. However, the prospect of finding a common voice will also be more difficult.

Mr. Alfredo Montufar-Helu - China economic expert, GreenPoint Strategic Consulting Company said: "By clarifying the trade tightening moves, the Chinese side may want to open up the prospect of further negotiations on these issues. Now the ball is in the US's court."

Ms. Anna Rathbun - Founder of Grenadilla Investment Consulting Company shared: "China and the US still have interdependence in terms of trade. The latest developments may only be temporary, but it partly shows that the negotiation process is facing many challenges and may continue to drag on."

Some predict that the US-China negotiations will continue in the coming months, but it may take until at least early next year for the parties to resolve the biggest remaining issues. And the volatility in trade and the prospects for negotiations will continue to create uncertainty, causing concern for investors in the coming time.

The global technology sector is suffering many negative impacts, especially the risk of disruption to the semiconductor supply chain.

Trade tensions weigh on the tech industry

In his latest post on social media early this morning Vietnam time, US President Donald Trump unexpectedly sent a softer message, saying that the situation will soon stabilize, and the US has no intention of harming China.

The new statements from the US President show that the US-China relationship will continue to have unpredictable variables in the coming time. And according to Bloomberg, in this wave of fluctuations, the global technology sector is suffering many negative impacts, especially the risk of disruption to the semiconductor supply chain.

Bloomberg, citing sources familiar with the matter, said China's restrictions on exports of rare earth minerals could increase costs and delay orders for weeks to ASML, the maker of the world's most advanced semiconductor manufacturing machinery. Meanwhile, US technology companies are also trying to figure out which software will be affected by US President Donald Trump's latest export ban.

Technology companies in the US and China will also face more legal risks. China has just launched an investigation into US chipmaker Qualcomm and previously Nvidia for alleged antitrust violations. In the opposite direction, the US has also put many Chinese technology companies on a trade blacklist. The technological confrontation is expected to be difficult to ease.

Mr. Olu Sonola - Head of US Economic Research, Fitch Ratings commented: "I think the competition will become more fierce. Obviously, both countries want to separate from the other side's technology industry and this process will take place slowly but surely. Many technology companies like Apple are adjusting their supply chains, because they see the risks and understand that trade barriers will continue, especially in the technology field, because the US and China are essentially in a "technology competition". This is a geopolitical and national security competition that both countries want to win. I do not think they will find a common voice in the technology field soon."

The tensions will also negatively impact technology stocks, raising concerns about a financial market crash. Because chip and artificial intelligence (AI) stocks have been the main drivers of the strong rally in both US and Chinese stocks in recent times, despite economic difficulties.

Ms. Anna Rathbun - Founder of Grenadilla Investment Consulting Firm commented: "Overall, the market is still in the expansion phase, mainly driven by technology and AI stocks. This makes the market more vulnerable, especially when the S&P 500 continues to hit record highs. Therefore, when there is unexpected bad news like US-China trade tensions, there will be strong sell-offs. In the rest of 2025 and all of 2026, we may see more volatility, if the tariff issues are not resolved."

Source: https://vtv.vn/thi-truong-chao-dao-vi-cang-thang-thuong-mai-my-trung-100251013094838861.htm