Global Markets Roiled as Trump’s 104% Tariffs on Chinese Goods Take Effect; Beijing Vows Retaliation

BEIJING/WASHINGTON, April 9, 2025 — President Donald Trump’s sweeping new tariffs—described as “reciprocal” in intent—officially took effect on Wednesday, intensifying trade tensions with dozens of countries. The most striking measure is a 104% duty imposed on Chinese imports, a move that has further escalated what many now describe as a full-scale global trade war.

The dramatic escalation has sent shockwaves through global markets. The S&P 500 has now lost nearly $6 trillion in market capitalization since the tariffs were unveiled just a week ago, marking the steepest four-day decline since the index’s inception in the 1950s. The benchmark is now teetering on the edge of a bear market, defined as a 20% drop from recent highs.

In Asia, markets reacted sharply. Japan’s Nikkei index dropped more than 3%, South Korea’s won plummeted to a 16-year low, and government bonds across the region took heavy hits as investors fled to cash. U.S. stock futures also pointed to a fifth consecutive day of losses, underscoring the broad and deepening impact of the escalating trade measures.

President Trump, however, appeared undeterred by the financial turbulence, signaling that the tariffs could be both a long-term policy tool and a negotiating tactic. “We have a lot of countries coming in that want to make deals,” Trump said during a White House event on Tuesday. Later in the day, he added that he expected China to also seek an agreement.

Talks have already been scheduled with key U.S. allies including South Korea and Japan, both of which are among America’s largest trading partners. Italian Prime Minister Giorgia Meloni is expected to visit Washington next week for high-level discussions, and Vietnam’s Deputy Prime Minister is slated to meet U.S. Treasury Secretary Scott Bessent later Wednesday. Vietnam, a major low-cost manufacturing hub, has been hit with some of the steepest tariff rates globally under the new measures.

While hopes for negotiations buoyed stock markets earlier on Tuesday, those gains were erased by the close of the trading day, reflecting investor uncertainty over the direction and duration of U.S. trade policy.

Meanwhile, Beijing has vowed to retaliate in response to what it calls “economic blackmail.” The Trump administration nearly doubled tariffs on Chinese imports from 54% to 104%, citing retaliatory duties recently announced by China. The move was met with a sharp warning from Chinese officials, who promised to “fight” what they view as unjustified and unilateral pressure.

With economic volatility rising and diplomatic relations strained, the global financial community is bracing for further disruptions in trade, investment, and supply chains as the standoff continues.