Asia-Pacific markets fell Monday after China and the U.S. tightened trade restrictions and traded fresh accusations, renewing tensions between the world’s two largest economies. Hong Kong’s Hang Seng index declined 3.41%, while mainland China’s CSI 300 traded 1.76% lower. The offshore Chinese yuan strengthened 0.1% to 7.1267 against the greenback. The 10-year China government bond yield lost more than 5 basis points to 1.752%. China on Sunday said “we are not afraid of” a trade war with the United States after President Donald Trump vowed to impose punishing new retaliatory tariffs on Chinese imports.
Stocks settled decidedly lower after a rapid decline on Friday following President Donald Trump’s threat of higher tariffs on China, in which he accused the country of “becoming very hostile” with its restrictions on rare earth metals. Stocks accelerated selling into the close, with the Dow Jones Industrial Average closing down 878.82 points, or 1.9%, at 45,479.60. The S&P 500 lost 2.71% to settle at 6,552.51, while the Nasdaq Composite fell 3.56% to 22,204.43. The broad-based index’s decline was the largest since April 10. Prior to Trump’s comments, stocks were sizably higher, with the Nasdaq hitting a new all-time intraday high.
Gold popped back up above the $4,000-an-ounce level on Friday, set for an eighth straight weekly gain, after U.S. President Donald Trump’s warning of possible fresh tariffs on China accelerated a flight to safe-haven assets. Spot gold was up 0.8% at $4,007.39 per ounce. The metal has gained 3.2% so far this week. U.S. gold futures for December delivery rose 1.3% to $4,024.40. Non-yielding bullion, which hit a record high of $4,059.05 on Wednesday, is considered a hedge during times of broader uncertainty. Geopolitical risks and U.S. rate cut expectations have contributed to gold’s rally. President Trump stated there is no reason to meet with China’s President Xi Jinping in two weeks as planned.
U.S. crude oil fell 4% on Friday, after President Donald Trump threatened China with higher tariffs in retaliation for Beijing imposing stricter export controls on rare earth minerals. U.S. crude oil dropped $2.61, or 4.24%, to close at $58.90 per barrel. Global benchmark Brent was down $2.49, or 3.82%, to settle at $62.73 per barrel. This latest setback once again raised concerns that higher tariffs may slow the global economy and hurt demand for oil. “I will be forced, as President of the United States of America, to financially counter their move,” Trump said on his social media platform Truth Social.
President Donald Trump on Friday said the United States would impose new tariffs of 100% on imports from China “over and above any Tariff that they are currently paying,” starting on Nov. 1. Trump also announced that the U.S. would impose export controls on “any and all critical software” starting on the same date. The announcement came in retaliation for new controls that China imposed on exports of rare earths minerals, which are essential for high-tech industries including automobiles, defence, and semiconductors. Trump suggested he would cancel a planned meeting with Chinese President Xi Jinping at the upcoming APEC summit in South Korea.
French President Emmanuel Macron on Friday named Sebastien Lecornu as prime minister, reappointing him after he quit earlier this week. Macron hopes Lecornu can draw enough support from a deeply divided parliament to pass a 2026 budget. Lecornu’s immediate task will be to deliver a budget to parliament by the end of Monday. Macron risks political backlash as rivals have called for snap elections or his resignation. Lecornu stated he accepted the mission out of duty to ensure France has a budget by the end of the year and to address the daily life issues of citizens.
Defence Secretary Pete Hegseth announced an agreement to build a Qatari Emiri Air Force facility at the Mountain Home Air Force Base in Idaho. The facility will host a contingent of Qatari F-15s and pilots, allowing them to train with American military personnel to enhance lethality and interoperability. Hegseth made the announcement at a Pentagon press conference with Qatari Defence Minister Sheikh Saoud bin Abdulrahman Al Thani. Qatar remains a key U.S. ally in the Middle East, hosting the Al-Udeid Air Base, the largest American military installation in the region.
The United States is sending about 200 troops to Israel to help support and monitor a ceasefire deal in Gaza. U.S. Central Command will establish a “civil-military coordination centre” to facilitate the flow of humanitarian aid as well as logistical and security assistance into the territory. The team includes service members with expertise in transportation, planning, logistics, and engineering. Officials clarified that no American troops will be sent into Gaza. The task force will also include representatives from partner nations like Egypt, Qatar, and Türkiye to coordinate with Israeli forces and avoid clashes.
China’s exports grew 8.3% in September in U.S. dollar terms, beating economists’ estimates of a 7.1% rise. Imports logged their strongest gain in over a year, jumping 7.4% and significantly exceeding forecasts of 1.5% growth. Despite the strong data, a formal trade deal with the U.S. remains elusive. Tensions between Beijing and Washington have flared recently as both sides ramped up restrictions, threatening to erode progress made after several rounds of bilateral talks earlier this year.
The Trump administration began laying off thousands of federal workers on Friday, the 10th day of the government shutdown. President Trump stated that the number of "Reductions in Force" (permanent job cuts) would "be a lot" and suggested they would be "Democrat-oriented." Unlike furloughs, where employees return after a shutdown, these permanent layoffs target specific programs. The move marks a significant escalation in the ongoing budget stalemate between the administration and Democratic officials.
The United States could impose export controls on Boeing plane parts in response to Chinese export limits on rare earth minerals, President Donald Trump said on Friday. Trump noted that China operates a large fleet of Boeing planes that require regular parts and maintenance. Boeing has been a frequent tool in Trump's efforts to reshape global trade. In April, Beijing temporarily ordered Chinese airlines to stop taking deliveries of new Boeing jets. Trump suggested that targeting airplane parts would be a significant leverage point in the trade dispute.
FCC Chair Brendan Carr announced that major U.S. online retailers have removed several million listings for prohibited Chinese electronics. The crackdown targets equipment on a barred list or unauthorized by the agency, including products from Huawei, Hikvision, ZTE, and Dahua. Carr stated that companies are implementing new processes to prevent future listings of prohibited items under FCC oversight. The effort is part of a broader strategy to secure U.S. telecommunications and consumer electronics markets from unauthorized foreign technology.
The Trump administration has reached an agreement with AstraZeneca to cut drug prices in the U.S. to "most-favoured nation" levels. Starting early next year, primary care medications from AstraZeneca will be available on a new government website, TrumpRx.gov, at significant discounts. In return, AstraZeneca will be exempt from pharmaceutical sector tariffs for three years and plans a $50 billion investment into its American operations, including a new production facility in Virginia. This deal follows a similar pact made with Pfizer late last month.
Indian Prime Minister Narendra Modi met with Qualcomm CEO Cristiano Amon to discuss commitments toward India’s semiconductor and AI missions. Following the meeting, Qualcomm announced a new $150 million Strategic AI Venture Fund to support India's startup ecosystem, focusing on edge AI for automotive, robotics, and mobile sectors. The announcement coincides with the India AI Impact Summit in New Delhi. Meanwhile, China has initiated an antitrust investigation into Qualcomm regarding its acquisition of Israeli firm Autotalks, looking for potential violations of Chinese law.