- China’s Retaliation: China imposed a 34% tariff on all U.S. goods, effective Thursday, April 10, 2025, matching Trump’s “Liberation Day” tariffs, while restricting U.S. companies, rare-earth exports, and probing DuPont.
- Trade Imbalance: The U.S. imported $462.62 billion from China in 2024, far exceeding its $143.5 billion in exports, per UN COMTRADE data.
- Market Fallout: Global stocks fell ~4.5%, with the Dow dropping 1,000 points and the Nasdaq nearing bear market territory.
- Economic Risks: Goldman Sachs raised global recession odds to 55%.
- Oil Gaps Down: Oil prices fell 7.7% to $61/barrel.
- U.S. Stance: Trump called it a “golden opportunity,” while Rubio highlighted resilience despite market “freefall.”
On Friday, April 4, 2025, China escalated the U.S.-China trade war by announcing a sweeping 34% tariff on all American goods, set to take effect Thursday, April 10. The move, a direct response to President Trump’s “Liberation Day” tariffs on Chinese imports, marks a shift from Beijing’s earlier targeted retaliations to a blanket approach. Alongside the tariffs, China restricted over two dozen U.S. companies, curbed rare-earth mineral exports—vital for tech and defense—and launched an investigation into U.S. chemicals giant DuPont.
The stakes are high, especially given the trade imbalance: in 2024, the U.S. imported $462.62 billion in goods from China while exporting just $143.5 billion, according to UN COMTRADE data. China’s broad retaliation, particularly its rare-earth restrictions, threatens U.S. supply chains and signals Beijing’s readiness for a prolonged economic fight.
Global markets reacted swiftly, plunging ~4.5%. The Dow shed 1,000 points after an intraday low of 1,200, and the Nasdaq, down 4.1%, hovered near bear market territory—over 20% off its recent peak. European stocks fell over 3.5%, oil prices dropped to $61 a barrel (a 2021 low), and 10-year Treasury yields slipped below 3.9% as investors flocked to bonds. Goldman Sachs raised its global recession odds to 55%, reflecting fears of lasting damage to corporate earnings and economic stability.
Trump remained defiant, calling the turmoil a “golden opportunity to build wealth” and accusing China of overreacting. Secretary of State Marco Rubio admitted markets were in “freefall” but pointed to a robust U.S. jobs report—235,000 jobs added last month—as evidence of resilience. Yet, investors brushed off the optimism, boosting expectations for Federal Reserve rate cuts.
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