Global markets took a sharp hit on Friday after China
announced a sweeping 34% tariff on all U.S. goods, escalating tensions in the
ongoing trade war.
The move sent shockwaves through the global stock
markets and cryptocurrencies alike, with Bitcoin retreating from its early
gains to trade at $82,000 at the time of this publication. Investors are now bracing for further volatility as
fears of a prolonged economic standoff intensified.
Bitcoin and Stocks Take a Hit
China’s retaliatory tariffs, which came in response to
President Donald Trump’s decision to increase levies on Chinese imports to 54%,
spurred risk-off sentiment across global markets.
Bitcoin initially climbed to $84K before reversing
course, dropping 3% to $81K in the daily chart. Other cryptocurrencies,
including Ethereum (ETH), Solana (SOL), and Dogecoin (DOGE), also erased their
early gains.
Equity markets saw a similar reaction. S&P 500 and
Nasdaq tumbled more than 2% and 3%, respectively, following the announcement,
signaling another rough session for Wall Street. Investors rushed to reassess
the economic fallout from the escalating trade war.
China’s Counteroffensive in the Trade War
The Chinese government’s tariff hike represents one of
its strongest responses yet in the prolonged trade dispute. In addition to the
34% tariffs, Beijing imposed new export controls on certain rare earth
materials, Reuters reported.
It also lodged a formal complaint with the World Trade
Organization (WTO) and added 11 entities to its “unreliable entity”
list, effectively barring them from certain business operations in China.
Friday’s market rout extended beyond the U.S. to other
major economies. In Japan, Prime Minister Shigeru Ishiba called the tariff war
a “national crisis” as Tokyo’s stock market neared its worst weekly
performance in years.
LIBERATION DAY RECIPROCAL TARIFFS 🇺🇸 pic.twitter.com/ODckbUWKvO
— The White House (@WhiteHouse) April 2, 2025
European equities also posted significant losses, with
investors watching closely for the European Union’s next steps. Firms
such as Adidas, Puma, and Pandora have seen their stock prices tumble as the
tariffs target Southeast Asia, where many of these companies manufacture their
goods.
What’s Next?
With China’s countermeasures now in place, all eyes
are on the next move from the U.S. and its allies. The European Union has yet
to take a unified stance, with officials debating whether to activate its
‘Anti-Coercion Instrument,’ a policy designed to counter economic pressure from
third countries.
EU ready to retaliate against Trump’s tariffs, says von der Leyen https://t.co/lmKbwj51NQ
— Financial Times (@FT) April 3, 2025
For now, markets
remain on edge, and traders are preparing for further turbulence. Whether a
resolution is near or if the trade war will continue to spiral remains a
pressing question for investors worldwide.
This article was written by Jared Kirui at www.financemagnates.com.
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