Trump tariffs roil global markets

[WORLD] On April 9, 2025, the United States commenced enforcement of extensive new tariffs under President Donald Trump's directive, targeting imports from approximately 90 countries. China faces the most significant impact with a cumulative tariff rate of 104%, following its retaliation against prior U.S. duties. These measures are part of President Trump's "Declaration of Economic Independence," aimed at reducing trade deficits and bolstering domestic production. ​

The newly implemented tariffs include a 10% baseline tariff, with additional rates calculated based on trade deficits. Major U.S. allies such as Israel, the European Union, Japan, and South Korea are also affected, facing tariffs ranging from 17% to 25%. President Trump has expressed openness to negotiating customized bilateral trade deals with countries seeking tariff relief but insists that current tariffs will remain until trade imbalances and unfair practices are addressed. ​

Market Reactions and Economic Impact

The announcement of these tariffs has led to significant market volatility. The S&P 500 experienced a 10.5% drop over two days, with continued declines across other indices. Global stock markets also reacted negatively; Japan's Nikkei 225 fell nearly 4%, Taiwan's Taiex plunged 5.8%, and European markets saw declines of around 2%. In the U.S., the Dow hit a 52-week low, and the Nasdaq erased major intraday gains, marking its largest reversal since at least 1982. ​

In the bond market, U.S. Treasurys experienced a sharp selloff, with the 10-year Treasury yield rising to 4.47% before easing to 4.36%. This spike in yields has raised concerns about added economic pressure amid existing inflation and trade disruptions. ​

International Responses and Retaliation

China has vowed to "fight till the end," rejecting what it calls U.S. "blackmail" and warning of further countermeasures. The Chinese government has also launched an anti-monopoly investigation into Alphabet's Google and added two U.S. firms to its "unreliable entity list." ​

Other countries are also considering their responses. South Korea and Japan are planning countermeasures and negotiations, while the European Union and nations like Mexico and Taiwan are seeking diplomatic solutions to avoid an escalating trade war. ​

Domestic Reactions and Criticism

The tariffs have faced growing criticism both domestically and internationally. Tesla CEO Elon Musk has expressed concerns about the potential negative impact on the automotive industry. European politicians and economists have also voiced apprehensions about the broader economic consequences. A survey indicates that 73% of U.S. citizens expect rising prices as a result of these tariffs. ​

Despite these concerns, President Trump remains steadfast in his protectionist stance, emphasizing the need to address trade imbalances and unfair practices. The administration has signaled openness to trade negotiations but maintains that the current tariffs will persist until substantial progress is made.