Sou Hu Cai Jing·2025-10-11 15:01Core Viewpoint - The sudden announcement by Trump regarding additional tariffs on China has triggered a significant sell-off in the U.S. stock market, leading to fears of an escalating trade war and impacting major technology stocks [1][3][8]. Market Reaction - On October 10, U.S. stock indices experienced a sharp decline, with the Dow Jones dropping by 1.9%, the S&P 500 by 2.71%, and the Nasdaq by 3.56%, marking the largest single-day drop since April [1][3]. - Major technology stocks were heavily affected, with TSMC ADR falling over 6%, Broadcom and Tesla down over 5%, and Nvidia, Amazon, Apple, and Meta all experiencing declines of more than 3% [3][9]. - The Philadelphia Semiconductor Index plummeted by 4.7%, reflecting the severe impact on the semiconductor sector [9]. Trade War Context - Trump's tariff threat is a direct response to China's stringent export controls on rare earth materials, which are crucial for high-tech and military applications [4][11]. - China has implemented new regulations requiring foreign companies to obtain approval for transporting materials containing trace amounts of Chinese rare earth elements, particularly targeting the semiconductor industry [4][6]. Strategic Importance of Rare Earths - Rare earth elements are vital for modern technology and military applications, with each F-35 fighter jet requiring approximately 417 kilograms of rare earth materials [5]. - The U.S. Department of Defense relies on China for over 90% of its rare earth materials, highlighting the strategic dependency [6][12]. Supply Chain Concerns - U.S. chip companies are urgently assessing which products contain Chinese rare earths, fearing that China's licensing requirements could disrupt their supply chains [7]. - Analysts estimate that establishing a complete rare earth supply chain in the U.S. could take at least eight years, while Trump's proposed tariffs could be implemented as early as November 1 [14][15]. Broader Implications - The conflict over rare earths signifies a broader struggle for technological dominance, with potential ramifications for global supply chains and technology competition [11][15]. - The situation reflects a shift from resource-based disputes to technology-based blockades, indicating an intensifying trade confrontation between the U.S. and China [15].