Export restrictions on rare earths, threats of retaliation on Boeing software and spare parts, imposition of new tariffs... After months of de-escalation between China and the United States, both sides are hardening their positions ahead of the meeting between Donald Trump and Xi Jinping in South Korea at the end of the month.

Finally, it's down. On Friday, a message from Donald Trump on Truth Social threatening exorbitant tariffs on China sent the indices plummeting. The S&P 500 ended down 2.7% and the Nasdaq down 3.5%.

Finally, because until now, US indices had been setting record highs (the S&P 500 has set 33 since the beginning of the year), driven by the theme of artificial intelligence. This almost unstoppable momentum can be summed up in one statistic: the S&P 500 has remained within 2.5% of its record highs since June.

While Donald Trump's threats on Friday may have served as a pretext for a market that was no longer correcting, they nevertheless mark a resurgence of tensions between the world's two leading powers.

Indeed, after the tariff clash in April, tensions had gradually eased. This was thanks in particular to a series of meetings in several European cities: Geneva in May, London in June, Stockholm in July, and Madrid in September.

Beyond the extension of the tariff truce, relations seemed to be warming significantly with the agreement on the sale of TikTok's US operations, approved by Donald Trump and Xi Jinping during a telephone conversation on September 19. After this exchange, Donald Trump also confirmed a meeting with Xi Jinping in late October in South Korea, during the APEC summit. He also mentioned a trip to China next year and a visit by Xi Jinping to the United States.

On the markets, the impact of the tariff saga has gradually diminished. Over the months, agreements have been reached with certain trading partners and tensions with China have eased. So much so that the latest tariff announcements at the end of September barely caused a stir.

But after months of de-escalation, we may now be entering a new phase of escalation, starting with Beijing's announcement on Thursday that it will introduce controls on exports of rare earth technologies.

On Friday, Donald Trump responded by threatening to impose additional 100% tariffs on China starting November 1, along with new export controls on strategic software. The US president also threatened to impose export controls on Boeing aircraft parts.

On the same day, the Chinese regulator announced the opening of an antitrust investigation against Qualcomm, following its acquisition in June 2025 of Israeli chip designer Autotalks.

Finally, China announced the introduction of levies on ships built or registered in the United States (the measure also applies to those owned by companies in which at least 25% of the shares or seats on the board of directors are held by US investment funds). This is a reciprocal measure: in February, the Office of the US Trade Representative (USTR) announced the introduction of fees on ships built abroad. This measure is due to come into force on Wednesday.

Once all these points of tension have been listed, they must be placed in the context of the meeting scheduled between Xi Jinping and Donald Trump at the end of the month in South Korea: each side is hardening its position ahead of the discussions.

On Sunday, Donald Trump himself toned down his inflammatory message from Friday: "Don't worry about China, everything will be fine!" The message was received by the markets. European indices are up, while the S&P 500 is up nearly 1.5% in pre-market trading.

Situation tightening up again between China and the US