Global stock markets slid again on Tuesday morning after President Trump signed an executive order imposing an additional 50% tariff on Chinese imports. U.S. stock index futures, in particular, tumbled back toward recent lows as investor sentiment took another hit.
104% Tariff on Chinese Imports
On April 2, during what Trump called “Liberation Day,” the U.S. introduced a Reciprocal Tariff—a universal 10% tariff on all imported goods, along with additional targeted tariffs on several countries. China was hit especially hard, facing a 34% tariff on top of a 20% tariff announced back in March.
In response, China announced its own 34% tariff on all U.S. imports. This led Trump to threaten even higher tariffs if China didn’t reverse its actions.
On Monday evening (U.S. time), Trump followed through on his warning and signed an executive order to add a 50% tariff on Chinese imports. This brings the total tariff on Chinese goods to a massive 104%.
Potential Trade War & Recession Risks
Investor sentiment remains cautious as fears grow over a possible trade war and economic recession triggered by rising tensions between the U.S. and China.
With U.S. tariffs on Chinese goods now raised to 104%, there’s concern that China may respond with even tougher measures. China has strongly opposed the latest U.S. actions, calling them “intimidation” and “blackmail.”
In a statement, China’s Ministry of Commerce said it would “fight to the end” to defend its sovereignty and protect its economic interests.
Additionally, China has taken steps such as devaluing its currency to bolster export competitiveness and imposing restrictions on exports of rare earth minerals.
The Chinese government has said it is willing to hold talks with the U.S., but only if the discussions are based on equality and mutual respect. However, that effort seems to have stalled, especially after President Trump moved forward with even higher tariffs.
Market Reaction: US Stock Tumbled, Again
The U.S. stock market dropped again on Tuesday morning, wiping out the rebound seen over the past two days. The S&P 500 index fell back below the key 5,000 level, reflecting growing investor concern.
“With the risk of a broader trade war increasing, it’s unlikely the market will recover strongly anytime soon,” said Shawn, Senior Analyst at Ultima Markets. He added that, investors should stay cautious, even if short-term rebounds occur.
(SP500+, Day Chart Analysis; Source: Ultima Market MT5)
From a technical perspective, the rejection within the 5270-5170 range, considered bearish territory for the S&P 500, keeps the index on a negative outlook. Meanwhile, Investors should remain cautious and closely monitor price action around the key support level at 4800.
Disclaimer
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