President Trump’s latest moves have shaken global markets, as his administration implemented a 104 percent tariff on Chinese goods. Stocks and bonds slumped in response, while Beijing retaliated with its own levies. European leaders are also preparing their measures in response.
These developments heighten concerns that the ongoing trade war could precipitate a global recession. Losses have mounted in stock markets worldwide since Trump announced the tariffs last week. On Wednesday, Asian markets fell further, and European stocks followed suit, with France’s CAC 40 index erasing its gains for the year.
The S&P 500, the benchmark U.S. stock index, hovered near a critical threshold, reflecting investor fears over potential disruptions to global supply chains and inflationary pressures. The tariffs, which took effect just after midnight, have led several U.S. allies to engage in talks with the Trump administration, seeking to mitigate the impacts. About 70 countries, including Taiwan and Vietnam, have approached the United States, and discussions with Japan and South Korea are planned.
In Guangzhou, China, the mood among factory owners was tense as they grappled with the new levies.
Trump tariffs rattle global markets
One factory owner expressed confidence in continued U.S. demand but worried about declining consumer confidence.
Trump also announced impending major tariffs on Indian drugmakers, previously exempt from such measures. This move could shift more pharmaceutical production back to the United States. On Tuesday, India and New Zealand cut borrowing costs, reflecting the pessimism surrounding global economic prospects due to the tariffs.
The Chinese government issued a stern denouncement of U.S. trade policies, accusing the United States of protectionism and violating trade agreements. The response included plans to impose additional tariffs on low-value parcels from China entering the U.S. without customs inspections. The parallels between President Trump and former British Prime Minister Liz Truss have become more pronounced, as both faced market turmoil following significant economic announcements.
On Wednesday, U.S. Treasury yields rose sharply, reflecting investor concerns. The yield on the 10-year Treasury climbed to 4.5 percent, and the 30-year bond briefly traded above 5 percent. The market instability following these tariffs underscores the potential for significant economic consequences.
As countries brace for the fallout, the global trade landscape faces a period of uncertainty and heightened tension.
