President Donald Trump, left, shakes hands with China's President Xi Jinping during a meeting on the sidelines of the G-20 summit in Osaka. (AP)

US President Donald Trump on Friday threatened to sharply increase tariffs on Chinese imports and cancel a planned meeting with President Xi Jinping, in a broadside that sent markets and relations between the world’s two largest economies into a tailspin.

Trump, who was due to meet Xi in about three weeks in South Korea, accused Beijing on Truth Social of “holding the global economy hostage” after China dramatically expanded its export controls on rare earth materials on Thursday.

“I never thought it would come to this but perhaps, as with all things, the time has come,” Trump wrote, claiming: “Ultimately, though potentially painful, it will be

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