Live Updates: Trade War Escalates as China Hits Back Again at U.S.
"After President Trump imposed a 104 percent tariff on Chinese goods, Beijing announced a levy on U.S. goods of 84 percent. Stocks and bonds slumped as Europe also prepared to retaliate against the United States.
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Brussels2:53 p.m. April 9
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President Trump’s global trade war intensified on Wednesday as China announced additional levies on American goods, hitting back at the United States hours after Mr. Trump’s punishing new tariffs took effect. Stocks and bonds slumped on the moves, which heightened fears of a global recession as the European Union prepared its own retaliation for U.S. steel and aluminum tariffs.
Mr. Trump’s latest tariffs hit nearly all U.S. trading partners with new levies and raised import taxes on Chinese goods to 104 percent. Beijing then announced additional tariffs on imports from the United States, for a total levy of 84 percent, to go into effect within hours.
There is a significant exemption to the new tariffs today, for goods that have already been loaded onto ships or are in transit to U.S. ports. The executive order that Trump signed last week said that his higher tariffs on some countries would apply to all goods as of 12:01 a.m. Eastern time today, except shipments that had already been loaded onto a vessel and were in transit before midnight.
The head of France’s central bank, François Villeroy de Galhau, said Trump’s tariffs signaled a return to economic isolationism that would harm the U.S. and global economies. “This represents an unprecedented destruction of value by a democratically elected leader,” he told the French newspaper Le Monde. “Rarely have we seen an American government score such a goal against itself.”
U.S. tariffs on its largest trading partners
| Trading partner | Feb. 4 | March 4 | April 9 | Total | |||
|---|---|---|---|---|---|---|---|
| China | 10% | + | 10% | + | 84% | = | 104% |
| Mexico | 25%* | = | 25% * | ||||
| Canada | 25%* | = | 25% * | ||||
| European Union | 20% | = | 20% | ||||
| Japan | 24% | = | 24% | ||||
| Vietnam | 46% | = | 46% | ||||
| South Korea | 26% | = | 26% | ||||
| Taiwan | 32% | = | 32% | ||||
| India | 27% | = | 27% | ||||
| United Kingdom | 10% | = | 10% |
Notes: Goods from Canada and Mexico that fall under the U.S.M.C.A. trade pact — the agreement that replaced NAFTA — are not subject to the 25 percent tariffs.
Everyone on Wall Street is nervous about their pocketbooks, and Jamie Dimon, chief executive of JPMorgan Chase, just said on Fox Business that his bank had already lost some deals with international companies that now prefer to do business with banks in their own nations. On the escalating trade war, he urged: “Don’t let this go on too long, because it’s causing cumulative anger.”
Beijing on Wednesday aimed the latest blow in the escalating trade war between the United States and Washington, with plans to raise new tariffs on all American imports by 84 percent within hours.
China’s Ministry of Finance announced that it would match a 50 percent tariff on all imports from China that President Trump announced on Tuesday with its own 50 percent tariff. Last week, the two sides traded 34 percent tariffs on each other that are also taking effect now.
The head of Russia’s central bank, Elvira Nabiullina, said President Trump’s tariffs posed a “significant risk” to both the global and Russian economies. In a televised speech at the Russian Parliament, she described the tariffs as “tectonic shifts in global trade” that Russia needed to take into account.
Maria Zakharova, a spokeswoman for Russia’s foreign ministry, said Russia had “serious concern” about President Trump’s new tariffs. She told reporters in Moscow that Trump’s moves showed “Washington no longer considers itself bound by the norms of international trade,” and that the tariffs “violate fundamental rules of the World Trade Organization.”
Senator Rand Paul, Republican of Kentucky, said the markets offered a “very good barometer” for the president’s trade policies, adding: “When the market tanks like this, the people on the other side, the people who are for tariffs, ought to sit up and take notice.” The senator has helped lead an effort to repeal the emergency declaration under which Trump imposed the tariffs. For Republicans, Paul said in an interview, the question is, “if the chaos worsens, will they stand up to the president.”
Jamie Dimon, JPMorgan Chase’s chief executive, speaking on Fox Business, came close to endorsing President Trump’s tariffs. He called it “perfectly reasonable” to argue that the trade balance between the U.S. and other nations is unfair, though he said he hoped for more negotiations over the tariff rates. As for the market turmoil, “it’s not over yet,” he said.
Markets are in an unusual state at the moment where assets are falling across the board, led by dollar-denominated assets. Bonds are falling at the same time as stocks, and the dollar is weaker too.
Analysts at Rabobank, a Dutch financial firm, described it as a “strange situation” in which Treasury yields are climbing while traders are betting on more interest rate cuts from the Federal Reserve. They cited several possible reasons for the volatility in bonds, including investors’ wariness to hold long-dated bonds when uncertainty is so high, or traders liquidating bond holdings to meet demands for extra collateral from banks.
The Bank of England has warned that, amid the tumult in global markets, “the probability of adverse events, and the potential severity of their impact, has risen.” In a report by the central bank’s financial policy committee after its quarterly meeting, it said that “market functioning” had so far “remained orderly,” but added that “the risk of further sharp corrections remains high.”
The disruption to global trade unleashed by President Trump makes it “imperative” for Britain to forge closer economic ties with the European Union and reverse some of the damage caused by Brexit, said Rachel Reeves, Britain’s chancellor of the Exchequer. Her comments, made to The Financial Times, suggest that Reeves is pushing for an ambitious post-Brexit economic “reset” with the E.U., ahead of a summit with the bloc scheduled for May 19.
“I think we are going to see a rapid succession of these deals that will give CEOs greater certainty,” Treasury Secretary Scott Bessent said, on a day when executives are growing spooked about a prolonged trade war. He specifically pointed to continuing conversations with Japan, Vietnam, South Korea, India and Britain on trade.
The Netherlands unit of the Indian conglomerate Tata Steel said it would cut 1,600 jobs as part of a reorganization. Steel producers in Europe, already struggling with high energy prices, are grappling with 25 percent tariffs imposed last month by President Trump on metals imported to the U.S.
Treasury Secretary Scott Bessent signaled that the U.S. isn’t planning to back down after China once again retaliated against President Trump’s tariffs. “They are the surplus country,” Bessent said on Fox Business. “Their exports to the U.S. are five times our exports to China. So, they can raise their tariff, but so what?”
But Bessent also appeared to offer something of a potential off-ramp to China. “What would be a very good step with the Chinese would be acknowledging that the precursor chemicals for fentanyl come from China,” he said. “They make their way into North America, and then are sold into the U.S.”
Prime Minister Giorgia Meloni of Italy will meet President Trump in Washington next Thursday, according to the White House press secretary, Karoline Leavitt. Meloni told a meeting of Italian business leaders that she intended to use her trip to negotiate a rollback of tariffs, aiming to eliminate reciprocal tariffs on industrial goods between the U.S. and the European Union.
There’s still pressure on bond markets. The 10-year yield on U.S. Treasuries climbed to 4.38 percent. It had dropped back below 4 percent at the end of last week.
Prime Minister Pedro Sánchez of Spain said he would strengthen commercial ties with Vietnam during a visit there today, as a way of dealing with the uncertainty unleashed by Trump’s tariffs. Spain will create a credit line for its companies to invest in Vietnam, Sánchez said, adding that a trade war “favors no one.” Sánchez is scheduled to visit China on Friday.
Beijing’s decision to impose another 50 percent in tariffs on U.S. goods is a clear signal that China has no intention of backing down in this trade war. Both Beijing and Washington have shown a willingness to shut down most bilateral trade, at least temporarily.
The latest Chinese tariff on U.S. goods, which is scheduled to take effect in less than five hours, means that the two countries have now each announced two rounds of steep tariffs on each other in the past week. Trump imposed a 34 percent tariff on Chinese products a week ago, Beijing retaliated with its own 34 percent tariff, Trump responded with an additional 50 percent tariff, and now Beijing has matched him a second time. The latest move by China means that all shipments of American goods to China will face additional tariffs of 84 percent, starting just after midnight in Beijing.
China also announced that it was putting export controls on 12 more American companies and had added six more American companies to its list of “unreliable entities” that are mostly barred from doing business in China or with Chinese companies.
Millions of small investors have piled into India’s stock market in recent years, eager to build wealth by betting on the country’s economic growth. Catchy advertising and easy-to-open online trading accounts have wooed young people and retirees alike, demystifying investing and fueling the exuberance.
This week, many of those investors got a rude shock — and an introduction to the pitfalls of globalization — when Indian markets buckled from fears that President Trump’s new tariff regime would induce a global recession.
Stock indexes dropped further on the news that China had increased its retaliatory tariffs. Futures for the S&P 500 were down 1.5 percent.
Delta Air Lines said it could no longer give investors an estimate of how much money it will make this year. “Given the lack of economic clarity, it is premature at this time to provide an updated full-year outlook,” Ed Bastian, the airline’s chief executive, said in a statement, adding: “With broad economic uncertainty around global trade, growth has largely stalled.” He said Delta would not increase its capacity to fly passengers in the second half of the year compared to the same period in 2024.
The Chinese government announced that it was putting an additional 50 percent tariff on imports from the United States, matching the extra 50 percent that Trump had imposed to retaliate for an earlier move by China.
The Chinese government on Wednesday issued a lengthy denunciation of American trade policies, accusing the United States of years of protectionism and of violating the trade agreement the two sides had negotiated late in President Trump’s first term.
The document was issued by Beijing’s cabinet information office several hours after Mr. Trump raised to 104 percent the extra tariffs on Chinese goods that he has imposed in his second term.
The parallels between President Trump and Liz Truss, Britain’s shortest-serving prime minister, are growing starker. Ms. Truss triggered market turmoil in 2022 after she proposed sweeping tax cuts that she proposed to pay for with massive government borrowing. Ms. Truss was ultimately doomed by fears of a credit crisis after yields on British government bonds spiked.
Now, yields on U.S. Treasuries are beginning to rise. On Wednesday, in the hours after Mr. Trump’s latest tariffs went into effect, including levies of more than 100 percent on China, the yield on the 10-year U.S. Treasury rose to as high as 4.5 percent, up from around 3.9 percent a few days ago. The yield on a 30-year bond briefly traded above 5 percent.
News Analysis
A whopping increase in tariffs, followed by a whopping retaliation. Nationalist Chinese bloggers comparing President Trump’s levies to a declaration of war. China’s Foreign Ministry vowing that Beijing will “fight to the end.”
For years, the world’s two biggest powers have flirted with the idea of an economic decoupling as tensions between them have risen. The acceleration this week of their trade relationship’s deterioration has made the prospect of such a divorce seem closer than ever.
President Trump’s tariffs are causing considerable anxiety today in the garment manufacturing district of Guangzhou in southeastern China. Some American orders have already been canceled, saddling Chinese factories with losses for clothes that were already made. So far, wages have not fallen, as factories continue producing for the domestic Chinese market. But that market is flooded with clothes and prices are falling, so factories find little or no profit in selling to it.
“We are entering unchartered territory in the global financial system,” with simultaneous drops in the price of all U.S. assets, including stocks, the dollar and bonds, George Saravelos, the global head of foreign exchange research at Deutsche Bank, wrote in a research note. “It is very hard to foresee market dynamics in coming days,” he added, noting that the Trump administration’s trade policies were encouraging the selloff in U.S. Treasury bonds. Aiming to shrink trade deficits with major trading partners could reduce demand for U.S. assets.
A spokesman for China’s Foreign Ministry, Lin Jian, said in response to a question about the tariffs that China would “never accept such arrogant and bullying behavior” and would “definitely retaliate.”
The European Union plans to vote on Wednesday afternoon on its first retaliation measures in response to President Trump’s tariffs, moving closer to placing increased duties on a range of manufactured goods and farm products that would take effect in phases starting next week.
The list up for consideration is a slightly trimmed down version of one that was announced in mid-March in response to Mr. Trump’s steel and aluminum tariffs. E.U. officials have spent recent weeks consulting with policymakers and industries from across the 27-nation bloc in an effort to minimize how much the countermeasures would harm Europeans.
France’s industry minister, Marc Ferracci, has warned that China might start a “massive redirection” of exports toward Europe to avoid the 104 percent U.S. tariff on Chinese goods. Such a redirection could cause deflation in Europe, said Patrick Martin, the head of France’s biggest business trade group, Medef. “The risk is that growth will stall and we will fall into recession,” he added.
As France’s CAC 40 index plunged Wednesday, wiping out all its gains since the beginning of the year, French officials said the government was setting aside 5 billion euros if needed to support the French companies or industries that might be harmed by President Trump’s tariffs.
The tumult has also hit government bonds as investors move away from what are traditionally haven assets in times of uncertainty. Bond prices have dropped, sending yields higher. Long-dated bonds have been sold off the most. The yield on 30-year U.S. Treasuries has jumped to 4.8 percent, up from 4.4 percent at the end of last week.
Germany’s DAX index dropped 2.5 percent when it opened on Wednesday, before recovering slightly, as traders in Europe’s largest economy braced for another rollercoaster day. Economists and businesses are worried that the 20 percent tariffs will prevent the nascent growth forecast for Germany’s sluggish economy.
Indonesia, the biggest economy in Southeast Asia, is among the countries trying to negotiate with the Trump administration over what could be crippling new tariffs. It is sending a delegation of officials to Washington next week.
But in a sign of the chaos President Trump’s trade policy has unleashed, the first steps of the talks remain up in the air.
The FTSE 100 index in London fell about 1.5 percent. The United States has only imposed its “baseline” 10 percent tariff on Britain, so the country is not directly affected by additional reciprocal tariffs today.
The mood was sour in most Asian stock markets on Wednesday, and Europe was no different as trading opened. The Stoxx Europe 600 index dropped 2.6 percent.
When China announced across-the-board tariffs in retaliation last week, it scheduled them to take effect 12 hours after President Trump’s. That means 34 percent import taxes will kick in at noon Eastern time on Wednesday.
An important segment of India’s business community woke up Wednesday to a fright: President Trump had again brandished the threat of tariffs on pharmaceutical imports.
“We’re going to be announcing very shortly a major tariff on pharmaceuticals,” he told guests at a dinner held by the National Republican Congressional Committee.
China’s leader, Xi Jinping, has not publicly addressed the new U.S. tariffs. But on Wednesday afternoon, shortly after the tariffs took effect, Chinese state media said Xi had met with a small group of top officials to discuss how to bolster ties with China’s neighbors and “strengthen industrial and supply chain cooperation.”
For just about everyone in Asia, President Trump’s latest round of severe tariffs is a disaster. Everyone but Liu Gang, who sees this moment as a chance to double down on his electronics factory in the Philippines.
“I tell companies: ‘Come to the Philippines,’” Mr. Liu said as he competed to be heard above the din of several machines, weighing 400 tons each, stamping out metal parts for Fujitsu A.T.M.s on the factory floor downstairs.
Chinese censors appeared to be carefully curating public discussion about the U.S. tariffs that took effect on Wednesday. They promoted criticism of the United States, while seemingly playing down the specifics of how President Trump’s move would effectively increase import taxes on Chinese goods to 104 percent.
On Weibo, a popular social media platform, several hashtags that used the number 104 — such as “104 tariff rate” or “America to impose 104 percent tariff on Chinese goods” — returned an error message that said: “Sorry, the content of this topic is not displayed.”
Some analysts are skeptical that China’s export sector can weather these tariffs. “The scale of tariffs is simply too large for any exporters or consumers to swallow and is hard to completely offset by currency depreciation,” said economists at Société Générale, a French bank.
Tung Ngo
Reporting from HanoiVietnam is among the countries hit hardest by the new tariffs. A deputy prime minister is expected to meet Scott Bessent, the U.S. treasury secretary, in Washington on Wednesday, according to a copy of his schedule seen by The New York Times. He will also meet executives from companies including Boeing and KKR, the private equity firm.
President Trump spooked India’s pharmaceutical industry on Tuesday when he said he would be slapping new tariffs on one of the nation’s growing industries. The industry had been exempted in the first round of tariffs. Trump has aruged that in the long term these medications can be made domestically.
Australia’s beef producers aren’t particularly concerned about the tariffs because of strong demand from the U.S., where a quarter of production was sent last year, said Angus Gidley-Baird, an analyst at Rabobank. Ground beef patties may cost a few cents more for American households, he said. For Australian farmers, “This is probably about the best time. The U.S. industry needs that product at the moment.”
At least two central banks have cut borrowing costs on Tuesday, citing growing pessimism about the global economy. India and New Zealand made the moves at meetings that had been scheduled ahead of the tariff’s taking effect. Both cited the tariffs and the risk of slower economic growth.
As its trade negotiators rushed to Washington to seek a reprieve from President Donald J. Trump’s blanket tariffs, South Korea on Wednesday announced new measures to soften the blow of levies on the country’s carmakers.
The two efforts underlined the delicate balance that South Korea needs to strike after the country, one of the most loyal U.S. allies in Asia, was hit by some of the heaviest tariff rates announced by President Trump last week.
Vo Kieu Bao Uyen
Reporting from Ho Chi Minh City, VietnamFor Nguyen Van Trien, the director of Tan Phat Foods Corporation, a Vietnamese canned and frozen tuna exporter, the new U.S. tariffs are a hammer blow. America is the biggest destination for Vietnam’s tuna exporters. “The consequences are immeasurable,” he said. “How can I find a new market that can replace the U.S.?”
For now, most of America’s top trade partners are seeking to negotiate their way out of the sweeping new tariffs. Just two, China and Canada, have countered with new tariffs.
The 20 largest exporters to the U.S.
A few of the biggest
economies are
retaliating, or
threatening to.
China
$439 bil.
Canada
$413 bil.
S. Korea
$132 bil.
Taiwan
$116 bil.
Mexico
$506 bil.
Other major U.S.
exporters are
trying to negotiate
instead.
Switzerland
$63 bil.
Japan
$148 bil.
Vietnam
$137 bil.
Thailand
$63 bil.
Source: U.S. International Trade Commission
Note: Boxes sized by value of exports to the United States.
By Agnes Chang, Lazaro Gamio, Samuel Granados and Lauren Leatherby
Trading in U.S. Treasuries offers clues about how investors feel about the economy. When yields rise, which they have done since President Trump announced the tariffs, it indicates a more pessimistic view: higher inflation and sluggish growth. That’s the opposite of what Treasury Secretary Scott Bessent has said Trump wants.
I’m in Guangzhou, one of China’s key commercial and industrial hubs, where some factory owners are nervous about the new tariffs. One said he was confident that Americans would still want his products regardless of tariffs, but added that he was worried about consumer confidence and overall spending faltering in the United States.
South Korea’s most famous products — cars, smartphones and home appliances — are facing massive U.S. tariffs. The government is stepping in to make sure that automakers, who have plants in the U.S., can access more cheap loans to weather the crisis. And it’s cutting taxes domestically on vehicle purchases, to boost local demand.
South Korea has chosen to negotiate, sending its trade minister, Cheong In-kyo, to meet with U.S. officials. On Tuesday, before his flight, he said the goverment was considering meeting some of President Trump’s demands, including reducing its trade surplus. That could include buying more liquefied natural gas from the United States, he said."
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