New Delhi, Oct. 11 -- A tariff threat collides with China's rare-earth leverage, rattling markets and testing whether the world's two largest economies can keep talks from slipping back into a costly spiral.

WASHINGTON - Financial markets lurched lower on Friday after President Donald Trump threatened a "massive increase" in tariffs on Chinese imports and said there was "no reason" to meet President Xi Jinping this month, transforming an obscure fight over rare-earth exports into a broader test of the world's two largest economies and their uneasy truce on trade. Hours earlier, Beijing broadened its licensing regime for critical minerals, tightening oversight on how those inputs are mined, refined and used by foreign firms, a shift that ...