Global markets reacted sharply as tensions between the United States and China flared up once again. With both nations imposing fresh tariffs, stocks tumbled, oil prices dropped, and investors braced for more economic uncertainty.
Stock futures fell following China’s swift response to the latest round of US tariffs. S&P 500 futures declined, while Nasdaq 100 futures also slipped before recovering slightly.
Oil prices took a hit, with West Texas Intermediate crude falling nearly 2%, while the offshore yuan weakened. Meanwhile, the US dollar gained strength against all major currencies.
Initially, market optimism had risen after President Donald Trump announced a pause on tariffs for Canada and Mexico. Investors hoped for a similar delay on Chinese imports, but those hopes quickly faded when the new 10% US tariffs on all Chinese imports went into effect.
READ ALSO: China Strikes Back: Imposes 15% Tariff on US Goods in Retaliation Against Trump New Levies
Asian stocks had rallied earlier in the day on speculation of a potential trade deal, pushing Chinese stocks in Hong Kong up significantly. However, that optimism was short-lived once China retaliated.
In response, Beijing launched an anti-trust investigation into Google and imposed a series of targeted tariffs on American products, including oil, liquefied natural gas, and agricultural machinery.
Additionally, China announced export controls on rare-earth minerals and expanded its unreliable entity list to include more US firms.
While the countermeasures were significant, analysts noted that China’s response was more measured than a full-scale economic retaliation, suggesting that Beijing may be trying to prevent the trade war from spiraling further. Market analysts remain divided on whether these tariffs are simply a negotiation strategy or the beginning of a prolonged standoff.
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