Trump Administration Unveils 145% Tariff on China, Wall Street Stocks Sink

Key moments

US Markets Reel as China Tariffs Hits 145%

Thursday saw the White House impose additional tariffs on Chinese goods, bringing the total duty to 145%. US stocks reacted sharply as a result, shedding much of the gains achieved on Wednesday.

The Dow Jones Industrial Average experienced a notable decline, losing over 1,000 basis points, representing a 2.50% drop to 39,593.66. The tech-focused Nasdaq Composite also suffered losses, plummeting by 4.31% to close at 16.387.31. Similarly, the S&P 500 index slid by a significant 3.46% to 5.268, reflecting widespread investor concern over the escalating trade tensions and their potential ramifications for the US economy and corporate earnings.

Wall Street experienced a turbulent week due to the Trump administration’s recent back-and-forth regarding US trade policy. On Wednesday, President Trump announced a 90-day pause on tariffs exceeding the 10% baseline for most of the United States’ trading partners. This announcement spurred a rally across US markets as investors breathed a sigh of relief at the prospect of easing trade tensions.

However, China was notably excluded from this reprieve, which eventually served to dampen investor enthusiasm. Moreover, the administration’s subsequent clarification to CNBC on Thursday revealed the full extent of the tariffs now levied on Chinese imports–a staggering cumulative rate of 145%.

This move reignited fears of a derailment of economic growth, supply chain disruption, and consumers being burdened with increased prices. In addition, China had already announced retaliatory tariffs of 84% on goods imported from the US, and there are now concerns that Beijing will respond to Thursday’s announcement with further duty hikes.

Although President Trump hinted at the prospect of continued negotiations between the two global economic powerhouses, this failed to fully assuage investor concerns. The focus may now shift to how China will respond and the broader implications for global trade and economic growth.