Stock markets plunge as China announces retaliatory 34% tariffs on US goods – business live
Market slump accelerates as China announces retaliatory tariffs
Financial markets are now plunging following news that China has retaliated against the US over the tariffs announced by Donald Trump on Wednesday night.
In London, the FTSE 100 has now shed 313 points, or 3.7%, since the start of trading to 8173 points. That would be its biggest one-day decline since March 2023.
As this chart shows, the selloff has intensified in the last few minutes:
The selloff intensified after China’s finance ministry said it will impose additional tariffs of 34% on all U.S. goods from April 10 as a countermeasure to sweeping tariffs imposed by the US.
China’s State Council Tariff Commission said in a statement:
“This practice of the US is not in line with international trade rules, seriously undermines China’s legitimate rights and interests, and is a typical unilateral bullying practice,”
Banks continue to lead the sell-off in London. Barclays are now down 10% today. with NatWest down 9.5%.
Rolls-Royce, the jet engine manufacturer and services, were briefly down 12%.
Fears of a global economic slowdown are hitting miners; Glencore are off 8.7%.
Key events
“The market is doing one thing: pricing in a global recession,” says George Saravelos, currency expert at Deutsche Bank Research.
Saravelos believes that unless President Trump reverses the tariffs, the only “circuit-breaker to this trade shock” would be fiscal policy (ie, government spending and taxation policies).
He writes:
In the United States , the administration needs to re-anchor the debate around a fiscal strategy that offsets the huge tax rise that is about to take place.
We noted yesterday that Treasury Secretary Bessent refused to do this following the trade announcements and this further hit market sentiment. Examples of re-anchoring the fiscal debate include providing paychecks to households who are hardest hit from the tariff shock and introducing retroactive cuts to taxes for this year in the reconciliation bill that is currently being formulated in Congress.
Either way, the Republican leadership needs to convey a much greater sense of urgency in moving the fiscal package along and offsetting the fiscal tightening. Waiting till the summer – as they are communicating – might be too late.
European markets are being slammed today on fears about the impact of the unfolding trade war, as this data from LSEG shows:
The oil price is cratering too, as China’s retaliation against the US rocks global markets.
Brent crude is now down 6.6% today at $65.50 per barrel, the lowest since August 2021.
Wall Street futures plunge
The New York stock market is expected to fall sharply when trading begins in under three hours.
The futures market shows that the S&P 500 index, and the tech-focused Nasdaq, are on track to fall 2.5%.
Futures for the Dow Jones industrial average are down 950 points, indicating a 2.4% tumble.
China’s new 34% tariff on US goods matches the increase in duties on Beijing which Donald Trump announced on Wednesday.
News of China’s retaliation against the new US tariffs is driving stocks lower across Europe.
The Stoxx 600 index of Europe’s largest six hundred companies has now slumped by 4.4% today.
Germany’s DAX is down 5%.
Market slump accelerates as China announces retaliatory tariffs
Financial markets are now plunging following news that China has retaliated against the US over the tariffs announced by Donald Trump on Wednesday night.
In London, the FTSE 100 has now shed 313 points, or 3.7%, since the start of trading to 8173 points. That would be its biggest one-day decline since March 2023.
As this chart shows, the selloff has intensified in the last few minutes:
The selloff intensified after China’s finance ministry said it will impose additional tariffs of 34% on all U.S. goods from April 10 as a countermeasure to sweeping tariffs imposed by the US.
China’s State Council Tariff Commission said in a statement:
“This practice of the US is not in line with international trade rules, seriously undermines China’s legitimate rights and interests, and is a typical unilateral bullying practice,”
Banks continue to lead the sell-off in London. Barclays are now down 10% today. with NatWest down 9.5%.
Rolls-Royce, the jet engine manufacturer and services, were briefly down 12%.
Fears of a global economic slowdown are hitting miners; Glencore are off 8.7%.
Marketwatch: JPMorgan now see 60% chance of US recession after tariff hikes
JPMorgan’s economics team has just raised their recession probability to 60% following the aggressive tariff stance announced by U.S. President Donald Trump, Marketwatch report.
They add:
In a note entitled, “there will be blood,” chief economist Bruce Kasman and his team said this year’s 22-percentage tariff increase amounts to the largest tax hike since 1968.
“The effect of this tax hike is likely to be magnified — through retaliation, a slide in U.S. business sentiment, and supply chain disruptions. The shock is likely to be only modestly dampened by the flexibility tariff hikes afford for further fiscal policy easing,” they say.
They aren’t make immediate changes to forecasts as the initial implementation — and possible negotation — take hold. “However, we view the full implementation of announced policies as a substantial macroeconomic shock not currently incorporated in our forecasts. We thus emphasize that these policies, if sustained, would likely push the U.S. and possibly global economy into recession this year,” they say.
An index of the largest 50 companies in Europe is now in correction territory, Reuters reports, down 10% from its record closing high.
Euro Stoxx 50 Falls 10% From March Peak, Set For Correction
— LiveSquawk (@LiveSquawk) April 4, 2025
