President Donald Trump announced 100% tariffs on critical software and goods from China, effective November 1, 2025. The news shocked markets around the world. Bitcoin dropped almost 20%, briefly staying above $100,000, and over $19 billion in leveraged crypto positions were lost, affecting 1.6 million traders in just one day. Adding to the controversy, a mysterious short position placed just before the news reportedly made $88 million, which raised suspicions of insider trading as trade tensions between the U.S. and China grew.
$1.6 trillion was wiped out from the market yesterday. pic.twitter.com/z1003VQWoZ
— unusual_whales (@unusual_whales) October 12, 2025
“This caught everyone off guard — not just me, but leaders across the Free World,” Trump wrote in a long post on Truth Social early this morning. “I was set to meet President Xi in two weeks at APEC in South Korea, but at this point, that meeting doesn’t seem necessary.”
He added that the 100% tariff — which could take effect even sooner “depending on any new actions or shifts by China” — would effectively bring back the trade freeze on Chinese imports that existed earlier this spring.
Trump’s Friday morning Truth Social post — where he warned of imposing “massive” new tariffs — rattled investors, reviving memories of the spring’s tariff surge that sent duties on Chinese goods skyrocketing to 145%. Markets reacted swiftly: the Dow plunged 878 points, or 1.9%, the S&P 500 dropped 2.7%, and the Nasdaq slid 3.5%.
Though Trump has a history of making threats he doesn’t always follow through on, investors, consumers, and businesses alike still have plenty of reasons to stay uneasy. (CNN Business/ Elisabeth Buchwald)
The United States and China remain deeply intertwined despite growing tensions. As the world’s two biggest economies, they rely heavily on each other.
While Mexico has recently overtaken China as America’s top supplier of imported goods, the U.S. still sources hundreds of billions of dollars’ worth of products from China — from electronics to machinery. At the same time, China stands among the largest buyers of American exports, making the relationship a two-way economic lifeline that neither side can easily cut off.
In particular, electronics, apparel and furniture are among the top goods the United States receives from China. Trump has pushed CEOs, especially in tech, to move production to the United States, but he’s softened his approach in recent months as business leaders have satisfied the president with announcements of hundreds of billions of dollars in investments in US manufacturing — even if they continue to make the bulk of their products overseas.
Soon after slapping a minimum 145% tariff on Chinese imports — effectively a trade embargo — Trump carved out an exception for electronics, lowering their rate to 20%. The decision hinted at a quiet admission from his administration: those extreme tariffs were hitting the U.S. economy just as hard.
By May, both Washington and Beijing seemed ready to ease the strain. Officials from both sides agreed to scale back tariffs — China cut duties on U.S. exports from 125% to 10%, while the U.S. reduced its own from 145% to 30%. The détente sparked relief across global markets, sending both countries’ stock exchanges soaring. ( Reuters )
