US Imposes Tariffs on Global Imports, Stock Markets Crash Worldwide

炒年糕的貓貓
Apr 7
2 min read

On April 2 (U.S. time), Trump announced that starting from April 5, the U.S. would impose tariffs of varying degrees on imports from approximately 60 trade nations, including the EU and China.

Notably, this new measure includes an additional 34% tariff on Chinese goods, adding to the existing 20%, which means the total tariffs on Chinese products from the U.S. will increase by at least 54%.

Global Stock Markets React Sharply

Upon the announcement, global stock markets reacted dramatically and plummeted.

As of 4:00 PM on April 7 (Hong Kong time):

The S&P 500 fell by 10.81%
The Nasdaq dropped by 11.82%
The Dow Jones dropped by 9.48%
The Hang Seng Index fell by 13.81%, breaking the 20,000-point mark.

The stock market downturn reflects concerns about the escalating trade war and its potential negative impact on the global economy.

What is a Reciprocal Tariff?

Donald Trump

The U.S. is in an unequal trade position, where the trade deficit is not simply due to market demand or supply but results from non-market practices by other countries. Such unfair practices include cheap foreign labor, currency manipulation, and government subsidies, which erode the competitiveness of U.S. manufacturing and hinder growth opportunities.

As a result, Trump decided to retaliate with administrative measures by imposing reciprocal tariffs to counteract these unfair trade practices.

China’s Countermeasures

China strongly condemned the U.S. actions as "not in line with international trade rules" and "typical unilateral hegemonic behavior." China announced that starting from April 10, it would impose a 34% tariff on U.S. imports. These countermeasures further escalated trade tensions between the two countries and fueled concerns about the global economic outlook.

Tariff Impact Analysis

Increased Inflationary Pressure

When tariffs are imposed, the cost of importing raw materials and goods rises. These costs are often passed on to consumers, causing prices to increase and exacerbating inflation. This can also suppress consumer demand, negatively impacting economic growth.

Damage to Global Supply Chains

Modern global trade structures often rely on multinational supply chains. The imposition of reciprocal tariffs may disrupt these chains, increasing the procurement costs of raw materials, semi-finished goods, or finished products for companies, thus affecting production and delivery schedules.

Instability in Financial Markets

An escalation in the trade war may increase market uncertainty, leading to volatility in stock markets. With unclear economic prospects, investors might shift their funds to lower-risk assets such as U.S. Treasury bonds and gold.

Conclusion

While reciprocal tariffs may benefit certain domestic industries in the U.S., they also bring about inflationary pressures, economic instability, and other negative impacts. As the trade war intensifies, the global economic outlook becomes more uncertain. Citizens must manage their assets wisely to avoid risks. In the future, we will release more interesting articles and updates—stay tuned.