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WASHINGTON (AP) — President Donald Trump said Friday that “there seems to be no reason” to meet with Chinese leader Xi Jinping as part of an upcoming trip to South Korea and threatened additional tariffs after China restricted exports of rare earths needed for American industry.

The Republican president suggested that he was looking at a “massive increase” of import taxes on Chinese products in response to Xi’s moves. It’s possible that this could amount to either posturing by the United States for eventual negotiations or a retaliatory step that could foster new fears about the stability of the global economy.

“One of the Policies that we are calculating at this moment is a massive increase of Tariffs on Chinese products coming into the United States of America,” Trump posted on his Truth Social platform. “There are many other countermeasures that are, likewise, under serious consideration.”

The United States and China have been jostling for advantage in trade talks, after the import taxes announced earlier this year triggered a trade war between the world’s two largest economies. Both nations agreed to ratchet down tariffs after negotiations in Switzerland and the United Kingdom, yet tensions remain as China has continued to restrict America’s access to the difficult-to-mine rare earths needed for a wide array of U.S. technologies.

Trump did not formally cancel the meeting with Xi, so much as indicate that it might not happen as part of a trip at the end of the month in Asia. The trip was scheduled to include a stop in Malaysia, which is hosting the Association of Southeast Asian Nations summit; a stop in Japan; and a visit to South Korea, where he was slated to meet with Xi ahead of the Asia-Pacific Economic Cooperation summit.

“I was to meet President Xi in two weeks, at APEC, in South Korea, but now there seems to be no reason to do so,” Trump posted.

Trump’s threat shattered a monthslong calm on Wall Street, and the S&P 500 fell as much as 2% on worries about rising tensions between the world’s two largest economies.

On Thursday, the Chinese government restricted access to the rare earths ahead of the scheduled Trump-Xi meeting. Beijing would require foreign companies to get special approval for shipping the metallic elements abroad. It also announced permitting requirements on exports of technologies used in the mining, smelting and recycling of rare earths, adding that any export requests for products used in military goods would be rejected.

Trump said that China is “becoming very hostile” and that it’s holding the world “captive” by restricting access to the metals and magnets used in electronics, computer chips, lasers, jet engines and other technologies.

“I have not spoken to President Xi because there was no reason to do so,” Trump posted. “This was a real surprise, not only to me, but to all the Leaders of the Free World.”

The Chinese Embassy in Washington did not immediately respond to an Associated Press request for comment.

The U.S. president said the move on rare earths was “especially inappropriate” given the announcement of a ceasefire between Israel and Hamas in Gaza so that the remaining hostages from Hamas’ Oct. 7, 2023, attack can be released. He raised the possibility without evidence that China was trying to steal the moment from him for his role in the ceasefire, saying on social media, “I wonder if that timing was coincidental?”

There is already a backlog of export license applications from Beijing’s previous round of export controls on rare earth elements, and the latest announcements “add further complexity to the global supply chain of rare earth elements,” the European Union Chamber of Commerce in China said in a statement.

Gracelin Baskaran, director of the Critical Minerals Security Program at the Center for Strategic and International Studies in Washington, D.C., said China signaled it is open to negotiations, but it also holds leverage because to dominates the market for rare earths with 70% of the mining and 93% of the production of permanent magnets made from them that are crucial to high-tech products and the military.

“These restrictions undermine our ability to develop our industrial base at a time when we need to. And then second, it’s a powerful negotiating tool,” she said. And these restrictions can hurt efforts to strengthen the U.S. military in the midst of global tensions because rare earths are needed.

The outbreak of a tariff-fueled trade war between the U.S. and China initially caused the world economy to shudder over the possibility of global commerce collapsing. Trump imposed tariffs totaling 145% on Chinese goods, with China responding with import taxes of 125% on American products.

The taxes were so high as to effectively be a blockade on trade between the countries. That led to negotiations that reduced the tariff charged by the U.S. government to 30% and the rate imposed by China to 10% so that further talks could take place. But differences continue over America’s access to rare earths from China, U.S. restrictions on China’s ability to import advanced computer chips, sales of American-grown soybeans and a series of tit-for-tat port fees being levied by both countries starting on Tuesday.

Just what Trump’s threat meant was open to interpretation, as it could simply be an attempt to gain some leverage under the belief that China has overplayed its hand or an ominous sign of trade tensions leading to a potentially destructive increase in tariff rates.

Nebraska Republican Rep. Don Bacon said “China has not been a fair-trade partner for years,” but the Trump administration should have anticipated China’s restrictions on rare earths and refusal to buy American soybeans in response to the tariffs.

Wendy Cutler, senior vice president of the Asia Society Policy Institute, said Trump’s post shows the fragility of the détente between the two countries and it’s unclear whether the two sides are willing to de-escalate to save the bilateral meeting.

Cole McFaul, a research fellow at Georgetown University’s Center for Security and Emerging Technology, said that Trump appeared in his post to be readying for talks on the possibility that China had overplayed its hand. By contrast, China sees itself as having come out ahead when the two countries have engaged in talks.

“From Beijing’s point of view, they’re in a moment where they’re feeling a lot of confidence about their ability to handle the Trump administration,” McFaul said. “Their impression is they’ve come to the negotiating table and extracted key concessions.”

Craig Singleton, senior director of the China program at the Foundation for Defense of Democracies, a think tank, said Trump’s post could “mark the beginning of the end of the tariff truce” that had lowered the tax rates charged by both countries.

It’s still unclear how Trump intends to follow through on his threats and how China plans to respond.

“But the risk is clear: Mutually assured disruption between the two sides is no longer a metaphor,” Singleton said. “Both sides are reaching for their economic weapons at the same time, and neither seems willing to back down.”

_

AP writers Stan Choe in New York and Josh Funk in Omaha, Nebraska, contributed to the report.

$ORCL ( ▲ 3.4% ) $AMD ( ▼ 1.84% ) $NVDA ( ▲ 2.0% ) $ICE ( ▼ 0.58% ) $PSKY ( ▼ 2.87% ) $TSLA ( ▼ 0.72% ) $GM ( ▼ 0.53% ) $MBG ( ▼ 0.07% ) $BMWYY ( 0.0% )

• Oracle and the AI bubble: When stocks in one sector suddenly start jumping, and investors and industry players are pouring in hundreds of billions of dollars, we gotta ask: Is it a bubble? One of the first bellwethers may be Oracle $ORCL ( ▲ 3.4% ) , the database and hosting company that saw its shares rocket 36% in one day last month when it predicted that a $300 billion deal with OpenAI would see a 7X rise in its cloud-computing revenue over the next three years. But now comes a report in the usually well-informed tech newsletter The Information, that Oracle’s profit margins are getting squeezed. Oracle shares fell about 5.5% on Tuesday. Still, they’re up 74% so far this year, so if it’s a bubble, it’s got a long way to go before it bursts. 
• Betting on the also-ran: OpenAI, which appears to be starved for the chips it needs to make all its AI dreams come true, has cut a complicated deal with also-ran chipmaker AMD $AMD ( ▼ 1.84% ) to buy chips that can compete with Nvidia’s $NVDA ( ▲ 2.0% ) AI wafers. In all, OpenAI has pledged to buy 6 gigawatts worth of AMD chips, which could mean tens of billions of dollars in new revenue for AMD. But ramping up AMD to compete will be tough: AMD’s data center business is less than a tenth the size of Nvidia’s, and while OpenAI’s revenue is ballooning, from an expected $12.7 billion in 2025 to more than $125 billion by 2029, the company is burning through cash and says it won’t be turning a profit before 2029.
• Golden daze: The price of gold broke $4,000 an ounce this week for the first time in history, up 53% this year. That’s been fueled by everything from the West’s seizure of Russian assets to the ongoing trade wars, which have shaken faith in the stability of the global economy. There are also the Fed rate cuts, which some traders see as a sign the U.S. economy is headed for trouble. As Bart Melek, head of commodity strategy at TD Securities, told CBS News, gold “may be a better safe-haven than Treasuries.”
• Wanna bet? Big Board owner Interncontinental Exchange $ICE ( ▼ 0.58% ) says it will invest up to $2 billion in prediction market Polymarket. ICE says it will distribute Polymarket’s data, and the venerable exchange owner will add a patina of respectability to what some critics call a gambling site. Polymarket lets users bet on yes-or-no questions about anything from sports to politics, and is regarded in many countries as an unlicensed offshore gambling platform. U.S. citizens are banned from Polymarket, but in August, Donald Trump Jr. joined its advisory board, so that may not last too much longer.
• What would Walter say? CBS News has its first editor-in-chief, the anti-woke opinion writer Bari Weiss, who snagged the job while selling CBS parent Paramount $PSKY ( ▼ 2.87% ) her website The Free Press for $150 million. It’s not yet clear what Weiss’s role will look like. CBS News is retaining its president, Tom Cibrowski, who’ll be managing the network’s actual newsgathering operation. Among Weiss’s first jobs will be launching a debate show that sounds a lot like the CNN’s Crossfire. The new owner of the venerable news outlet, mogul David Ellison, whose Dad Larry’s Oracle cash helped him buy CBS parent Paramount, says he wants to engage centrists, but he and his pa are known as close pals of President Trump, raising the question about how much of a watchdog CBS will be over the administration. In July CBS paid Trump $16 million to withdraw his lawsuit over how 60 Minutes edited an interview with Kamala Harris. Weiss, 41, famously left the New York Times op-ed page in 2020, claiming she was being bullied for her views, and declared she was “done” with mainstream media. It may not matter. CBS’s evening news show is a distant third among the networks, with viewership down 10% in the 2024-25 season over a year earlier.

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• Last rites:Drug Store chain Rite Aid$RADCQ ( ▲ 80.0% ) has filled its last prescription, the company said in aterse announcementon its website. Failing to emerge from bankruptcy reorganization earlier this year, Rite Aid shut its last 89 stores this week. The 63-year-old chain once had more than 5,000 stores. Just two years ago, it had 2,000 outlets and 45,000 employees, including 6,100 pharmacists. Cause of death? Competition from deeper pockets at CVS$CVS ( ▼ 0.51% ) and Walgreens$WBA ( ▲ 0.5% ) , and more than 1,000 lawsuits for filling illegal painkiller prescriptions. These are hard times for pharmacies. Mail-order drugs and high rents shuttered a third of U.S. drugstores from 2011 to 2021, and even CVS and Walgreens shut about 1,000 locations each this decade. But the biggest threat to pharmacies is pharmacy benefit managers, who work to keep drug costs down for major health plans by limiting the profit margins for retail pharmacies. Some 80% of all U.S. insurance-paid prescriptionspass through the top three PBMs, CVS Health’s CVS Caremark, Cigna’s Express Scripts, and UnitedHealth’s Optum Rx.
• Car talk: It’s time for a new episode of The (Car) Price is Right! With the federal $7,500 EV credit gone, EV makers are dropping their prices to keep customers. Tesla $TSLA ( ▼ 0.72% ) is promising a new, slightly-stripped down Model Y at $40K (originally $45K) and $37K for a Model 3. Hyundai $HYMTF ( ▼ 7.44% ) says it’s cutting the 2026 Ioniq by $9K for a base-model sticker price of $35K. GM’s Chevy Equinox and Nissan’s $NSANY ( ▼ 1.41% ) $7201.T 2026 Leaf start at under $35K, and GM $GM ( ▼ 0.53% ) says it’s bringing out a new compact Chevy Bolt for less than $30K. That comes even as GM chief Mary Barra says she’s holding off on new EV models and putting her chips on more gas-guzzling pickups. Still, numbers of fast-charging ports — which can charge a car in 20 minutes — are up more than 80% in the two years that ended in August to more than 60,300 across the country.
• Janis Joplin won’t help: Mercedes-Benz $MBGAF ( ▲ 0.4% ) says car and van sales dropped 12% at the German luxury carmaker, as Trump’s tariffs sent U.S. sales down 17% and the explosion of electric cars in China knocked sales there down 27%. Still, sales grew 3% at home as EV sales rose 9% from a year earlier. And that China market is causing headaches for BMW $BMWYY ( 0.0% ) , which said Chinese consumers are buying fewer of the company’s cars, including its Mini and Rolls-Royce brands, cutting into profits. Shares of BMW are down more than 8% since the announcement. And Korean carmaker Hyundai, still reeling from the recent immigration raid that saw ICE snap the cuffs on some 300 white collar Korean workers, says it is getting savaged by the tariffs. Despite giving $1 million to Trump’s inauguration, pledging $21 billion in investments in the U.S., and record-breaking sales in the third quarter, net profit dropped 22%, the company said, blaming tariffs. 

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• The shutdown shuffle: Into the second week of the federal government shutdown, we’re all beginning to feel the pain. President Trump is threatening not pay Federal employees who’ve been furloughed, causing knock-on effects for everyone from mortgage companies to retail businesses. And while ICE Agents are getting paid, some 10,800 air traffic controllers are not. Airline industry expert Chris Dane says the shutdown is expected to cost the U.S. economy nearly $1 billion a week, while 58,000 TSA security officials work without pay. Government-backed small business loans are halted, government inspections needed to continue construction projects or manufacture drugs and medical equipment are halted, and IPOs are postponed, awaiting regulatory action. (Data provider Dealogic noted that IPO activity dropped 90% in the month following the Dec 2019 government shutdown, and warned that despite a buoyant stock market, the same thing could happen this year. We’re also coming up on open-enrollment for the majority of Americans without employer-sponsored health care plans, and the key issue of the shutdown — extending the federal funding that keeps insurance affordable — is unresolved. It’s a stark reminder of how tightly the federal government is woven into our daily lives. Without government job market or other economic data, the Fed is flying blind, just as it’s looking at a new rate cut. And without Fed-sanctioned data, businesses are hesitant to spend, as they see tariff-induced price hikes finally kicking in. The good news is that the situation is getting so acute, EY-Parthenon Chief Economist Gregory Daco says we’re likely looking at back-to-back rate cuts in October and December.
• Family business: Just how much money have the Trump family and their friends made from business dealings while Donald Sr. has been president? According to the investigative journalism site Whale Hunting, the total is over $3 billion, inlcuding $800 million by Trump sons Eric and Donald Jr.; $200 million by Kyle and Brandon Lutnick, the sons of  Commerce Secretary Howard Lutnick (including tariff refund agreements that are essentially bets on the tariffs Mr. Lutnick is in charge of); and Jared Kushner’s $2.75 billion cut of the Electronic Arts $EA ( ▲ 0.04% ) deal.
• Hill of bans: Apparently angered by U.S. tariffs, China is passing this year on its annual purchases of U.S. soy beans, which it usually buys to feed livestock and poultry, or convert into cooking oil and tofu. That’s left U.S. farmers afraid they’ll be saddled with rotting piles of worthless beans. Trump says he will act this week to help the growers, and is looking at adding another $10 to $14 billion to last December’s farm bailout. Trump’s pledged to fund that farm relief with revenue from tariffs. The whole thing is a little more complicated, though: One reason China’s not buying U.S. grain is because it can find it cheaper elsewhere. Where? Argentina. China’s announcement it’s buying 40 cargoes worth of soy from Argentina came just hours before U.S. treasury Secretary Scott Bessent said he’d agreed to buy $20 billion of Argentine bonds so its populist president Javier Milei, known as the Trump of Beunos Aires, could get out of yet another debt pickle. And why is Argentine grain suddenly so cheap? In order to raise the dollars it needs to pay off the bonds, Argentina suspended its export tariffs. “The painful reality may be that U.S. agriculture becomes the biggest casualty of the trade war,” wrote the trade publication Farm Progress.
• I’m the taxman: Not a lot of people seem to want to run the IRS. Treasury Secretary Scott Bessent, now acting commissioner, is the revenue service’s seventh boss this year. That changed this week, when former Fiserv CEO Frank Bisignano agreed to add CEO of the tax agency to his day job as head of the Social Security Administration. Bisignano has previously told associates that he took the job at Social Security to modernize the agency and avoid the headaches he’s seen his own family members experience, BBTW has learned. He could bring that approach to the IRS, but the agency is still reeling from the loss of 26,000 employees this year, and Bisignano’s been named in a class action lawsuit alleging that Fiserv “misled investors by artificially inflating its growth numbers,” by migrating clients from an older point-of-sale system to its updated Clover system, and claiming those were new signups. Fiserv denies the allegations.
• Taytay the Rock crusher: Taylor Swift’s 90-minute music video “The Official Release party of a Showgirl,” won the box office race last weekend, collecting $33 million at 3,702 theaters, while The Rock’s “Smashing Machine,” a $40 million action flick, was second, taking in only $6 million. Swift’s film, essentially a string of promos from her latest album, “The Life of a Showgirl,” filled its seats with practically no marketing, letting theater-owners know it was coming just two weeks before it opened, and running only for that one weekend.

• Sleeping satellites: With some 8,000 Starlink satellites floating above our heads, there were bound to be some failures. But Smithsonian astrophysicist Jonathan McDowell says the MuskSats are falling out of the sky at the rate of one or two every day. The Starlink sats have lifespan of just five to seven years, meaning that by the time Elon Musk turns 60, nearly every satellite up there today will have crashed,  burned, and been replaced. SpaceX has launched more than 2000 satellites so far this year. 
• Severance: Musk edition — Musk has agreed to settle a lawsuit brought by four former Twitter executives he fired, and who claim they’re owed $128 million in severance and penalties. The settlement details haven’t been announced, but in August, Musk agreed to pay severance to 6,000 other Twitter employees he fired back in 2022.
• Chipping away: xAI is reportedly in talks to raise $20 billion from investors, including AI chipmaker Nvidia. Much like Nvidia’s deal last month with OpenAI, Nvidia’s investment will be used by xAI to help buy Nvidia chips for a Tennessee data center, according to press reports. The chips will also be used to secure the debt portion of the financing, worth about $12.5 billion. Musk is rushing to finish the data center, which has been dogged by a lack of both chips and electric power, and local opposition to numerous temporary natural gas-fueled generators to power the center.

Tilly Norwood, the AI “actress” that has tinsel town talking, is nothing to fear. Here’s why...

Norwood was created by the production company Particle6. Tilly is fully synthetic, designed to star in films, commercials, and other media. Critics, including actors’ unions like SAG-AFTRA and Equity UK, argue that Tilly threatens the livelihoods of real performers by using AI models trained on the work of human actors, effectively appropriating their contributions. There are also copyright issues, questions about consent, and fair compensation for actors whose data may have been used without explicit approval.

Not many people remember an earlier computer generated character called Aki Ross, the lead character from the forgotten 2001 film “Final Fantasy: The Spirits Within”. Despite being played by not one but two actors, she was billed as a movie star in her own right. She even got a Maxim magazine photoshoot, which I recommend looking up for the sheer absurdity of it. Producers frothed at the mouth for this “actress” while actors feared the loss of their jobs, but all of that noise proved fruitless as Aki Ross’s debut film flopped so hard at the box office, it shuttered the studio that produced it and all the character’s files were deleted.

Even if the movie was a success, Aki was an empty puppet. At the time of “Final Fantasy: The Spirits Within”, Tom Hanks believed these computer generated “actors” were an imminent threat, and these same sentiments are being echoed by people like June Squibb about Tilly Norwood, but they are wrong.

The most famous movie about AI is “Terminator 2: Judgement Day,” and it proclaims there is “no fate but what we make.” I believe that’s true. These artificial creations are not the future if we don’t want them to be. Thanks to the wonderful work of SAG Aftra, Norwood will never be in a real production, which makes Tilly less than a footnote compared even to Aki Ross. At least Aki Ross was in a movie.

WASHINGTON (AP) — Most members of the Federal Reserve’s interest-rate setting committee supported further reductions to its key interest rate this year, according to minutes from last month’s meeting released Wednesday.

A majority of Fed officials felt that the risk unemployment would rise had worsened since their previous meeting in July, while the risk of rising inflation “had either diminished or not increased,” the minutes said. As a result, the central bank decided at its Sept. 16-17 meeting to reduce its key rate by a quarter-point to about 4.1%, its first cut this year.

Rate cuts by the Fed can gradually lower borrowing costs for things like mortgages, auto loans, and business loans, encouraging more spending and hiring.

Still, the minutes underscored the deep division on the 19-person committee between those who feel that the Fed’s short-term rate is too high and weighing on the economy, and those who point to persistent inflation that remains above the central bank’s 2% target as evidence that the Fed needs to be cautious about reducing rates.

Only one official formally dissented from the quarter-point cut: Stephen Miran, who was appointed by President Donald Trump and was approved by the Senate just hours before the meeting began. He supported a larger, half-point cut instead.

But the minutes noted that “a few” policymakers said they could have supported keeping rates unchanged, or said that “there was merit” in such a step.

The differences help explain Chair Jerome Powell’s statements during the news conference that followed the meeting: “There are no risk-free paths now. It’s not incredibly obvious what to do.”

Miran said in remarks Tuesday that he thinks inflation will steadily decline back toward the Fed’s 2% target, despite Trump’s tariffs, and as a result he doesn’t think the Fed’s rate needs to be nearly as high as it is. Rental costs are steadily declining and will bring down inflation, he said, while tariff revenue will reduce the government’s budget deficit and reduce longer-term interest rates, which gives the Fed more room to cut.

Yet many other Fed officials remain concerned about stubbornly high inflation, the minutes showed. Jeffrey Schmid, president of the Federal Reserve’s Kansas City branch, said in a speech Monday that “inflation is too high” and argued that the Fed should keep rates high enough to cool demand and prevent inflation from worsening.

And Austan Goolsbee, president of the Fed’s Chicago branch, said in an interview Friday with The Associated Press that he supported a cautious approach toward more cuts, and wanted to see evidence that inflation would cool further.

“I am a little uneasy with front loading rate cuts, presuming that those upticks in inflation will just go away,” he said.

The minutes provide insight into how the Fed’s policymakers were thinking last month about inflation, interest rates, and hiring. Since then, however, the federal government shutdown has cut off the flow of economic data that the Fed relies on to inform its decisions. The September jobs report wasn’t issued as scheduled last Friday, and if the shutdown continues, it could also delay the release of the inflation report set for next Wednesday.