On Friday, U.S. President Donald Trump rekindled the trade war with China, imposing steep tariff hikes on imports from Beijing. The decision marks the end of a fragile economic truce between the two global powerhouses.

The president announced a 100% tariff on U.S.-bound Chinese exports as well as new export controls on critical software. Trump's move was a direct response to China's recent expansion of its rare earth element export controls, a sector where China remains dominant.

Markets responded swiftly, with the S&P 500 Index experiencing its most significant drop since April, driving investors toward safer assets. Tensions threaten to unravel efforts for diplomacy as experts warn the economic detente may not survive.

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