Bitcoin (BTC) dropped 3% amid a broader market rout after President Donald Trump announced that the US is considering escalating tariffs against China in response to newly imposed rare-earth export controls.
Total liquidations reached $807 million over the past 24 hours, as BTC fell to $116,585 as of press time.
On a lengthy statement on Oct. 10 via Truth Social, Trump accused China of attempting to monopolize rare-earth elements and announced plans for “a massive increase of tariffs on Chinese products coming into the United States of America.”
Bitcoin traded at $118,239.25 as of press time, down 2.8% and briefly losing the $118,000 support level. Long positions absorbed nearly $600 million in liquidations over the past four hours following Trump’s post, per Coinglass data.
The president canceled a scheduled meeting with Xi Jinping at APEC in South Korea and stated he would “financially counter their move” depending on China’s response.
Supply chain shocks
China tightened its rare-earth export controls between Oct. 9 and Oct. 10, expanding its licensing requirements to cover additional elements and technologies.
Beijing extended restrictions to foreign-made products containing Chinese rare-earth or processed using Chinese technology, asserting regulatory authority beyond its borders. Officials signaled rejections for defense applications while flagging semiconductor and AI uses for heightened scrutiny.
Markets interpreted the controls as a supply chain shock. Rare-earth miners outside China rallied on tighter supply expectations, while tech and industrial equities faced pressure from potential input bottlenecks.
European officials called the move a “great concern,” while Washington weighs potential countermeasures.
Risk assets sold off across the board. The S&P 500 fell 2% and the Nasdaq dropped 2.7% as traders reduced risk in portfolios. Bitcoin’s correlation with tech equities pulled the crypto market lower alongside broader risk-off sentiment.
Potential US response
China controls roughly 70% of global rare-earth production and 90% of processing capacity. The elements power electric vehicle batteries, semiconductors, defense systems, and renewable energy technologies.
Trump’s statement framed the export controls as “sinister and hostile,” claiming China seeks to hold other nations “captive” through resource dominance.
Trump noted the US holds “monopoly positions also, much stronger and more far-reaching than China’s” but had not deployed them until the Chinese letter prompted retaliation.
Trump wrote that the timing coincided with a Middle East peace announcement, questioning whether China coordinated the export restrictions with the geopolitical development.
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