China Strikes Back at U.S. with 84% Tariff – The Beginning of Global Financial Chaos

The Asian nation increased import duties on American goods in response to being hit with a 104% tariff by Donald Trump. Fears of a looming recession have shaken stock markets.

China Responds to U.S. Tariffs, Intensifying Trade Tensions

On Wednesday, April 9, China responded to new tariff barriers imposed by U.S. President Donald Trump by increasing import duties on American goods to 84%, further escalating the ongoing trade conflict between the two nations. The new tariffs will take effect on Thursday. Additionally, Beijing announced import restrictions on 18 American firms, primarily in the defense sector, expanding an existing sanctions list that already includes 60 U.S. companies.

This move follows Trump’s decision to fulfill his earlier warning by raising tariffs on Chinese imports to a total of 104%, effective the same day. The U.S. also implemented additional duties on imports from approximately 60 other countries, including members of the European Union.

"The U.S.'s continued escalation of tariffs against China is a mistake compounded by another mistake. It severely violates China's legitimate rights and interests and causes significant harm to the rules-based multilateral trading system," said China’s Ministry of Finance. The Chinese government had previously signaled its determination to "fight to the end" in defense of its trade interests.

Meanwhile, the European Union has expressed willingness to engage in dialogue with Washington but is also considering retaliatory measures. EU officials are scheduled to vote on Wednesday on an initial package of countermeasures, which would raise import duties on various American products.

Global Stock Markets Retreat Amid Tariff Escalation

The implementation of a new round of U.S. tariffs and the announcement of additional duties targeting China triggered a widespread downturn in global stock markets.

Taiwan saw the steepest losses in Asia, with the Taiex index plunging 5.9%. In Japan, Tokyo’s stock exchange dropped by 3.9%, while the broader Topix index, which includes a larger number of domestic companies, declined by 3.4%.

Technology stocks were hit the hardest in Japan. Shares of companies like SoftBank Group, Advantest, and Tokyo Electron fell between 6% and 8%.

In South Korea, the market dropped 1.74%, reaching its lowest level in 18 months. Australian markets also participated in the global sell-off, led by losses in the energy and natural resources sectors. The country’s benchmark S&P/ASX 200 index declined by 1.8%, while the broader All Ordinaries index closed down 1.85%.

New Zealand experienced a milder decline of 0.71%. There, the central bank cut its benchmark interest rate and signaled further easing to mitigate the risk of an economic slowdown.

European markets also opened sharply lower on Wednesday.

Germany's DAX index reported losses of 2.59%. In France, the CAC 40 dropped 2.1%, and the UK’s FTSE 100 declined by 2%.

The Stoxx 600 index, which includes 600 major companies across 17 European countries, was down by 2.7%.

China Rebounds on Domestic Support Measures

Market volatility is expected to continue, with occasional rebounds as investors respond to countries’ countermeasures.

In response to internal economic measures, Hong Kong’s stock market rose 0.7% on Wednesday. Meanwhile, China’s Shanghai Composite Index reversed earlier losses and gained 1.3%.

To help stabilize domestic equity prices, state-owned brokerages in China pledged support, and dozens of listed companies announced share buyback plans.