Bitcoin plummets 7% due to President Trump’s threat of tariffs on China, resulting in $9 billion in liquidations

Bitcoin (BTC) falls 7% The broader market setback came after President Donald Trump announced the United States was considering expanding tariffs on China. Newly imposed rare earth export regulations.

In the past 24 hours, the total amount liquidated reached $9 billion, and Bitcoin fell to $105,000.

In a lengthy statement via Truth Social on October 10, President Trump accused China of trying to monopolize rare earth elements and announced plans to “significantly increase tariffs on Chinese goods entering the United States.”

Bitcoin is down 2.8% at the time of writing, briefly losing its $118,000 support level. Long positions absorbed about $600 million in liquidations in the past four hours after President Trump’s post, according to Coinglass data.

The president canceled a meeting with Xi Jinping scheduled for APEC in South Korea and said that depending on China’s response, he would “counter their moves economically.”

supply chain shock

China tightened rare earth export controls from October 9 to October 10, expanding licensing requirements to cover additional elements and technologies.

The Chinese government has expanded its regulations to include foreign products containing Chinese rare earths and products processed using Chinese technology, asserting its regulatory authority beyond its borders. Authorities have signaled rejection of defense applications, while warning of increased oversight of semiconductor and AI applications.

The market interpreted this regulation as a supply chain shock. Rare earth mining companies outside China rose on expectations of tight supplies, while tech and industrial stocks faced pressure from potential input bottlenecks.

European officials called the move “deeply concerning,” and the U.S. government is considering possible countermeasures.

Risky assets were sold off across the board. The S&P 500 fell 2% and the Nasdaq fell 2.7% as traders de-risked their portfolios. The correlation between Bitcoin and tech stocks has driven the crypto market lower as risk-off sentiment spreads.

Potential US response

China controls about 70% of the world’s rare earth production and 90% of its processing capacity. These elements power electric vehicle batteries, semiconductors, defense systems, and renewable energy technologies.

President Trump’s statement characterized export restrictions as “evil and hostile” and claimed that China seeks to take other countries “prisoner” through its control of resources.

Trump noted that the United States holds a “much stronger and far-reaching exclusive position than China,” but did not develop that position until China’s letter prompted retaliation.

President Trump noted that the timing coincided with Middle East peace announcements and questioned whether China was coordinating its export controls with geopolitical developments.

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