The reciprocal policies initiated by U.S. President Donald Trump have prompted a swift reaction from China. Recently, the Chinese Finance Minister announced plans to increase tariffs on all imports from the United States by 34%, effective April 10.
Following this announcement, the Nasdaq index fell significantly, tumbling to 18,098, which represents a decline of 549 index points from Thursday’s close. This marks the index’s lowest level in nine months. Concurrently, oil prices dropped by $4.51, settling at $62.10 per barrel, the lowest level since August 2021. Meanwhile, gold prices experienced a rebound, approaching the daily high of $3,116 per troy ounce.
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This escalation came just a day after President Trump revealed his own reciprocal policy, which raised tariffs on Chinese products by 34%, effective April 9. With this reciprocal approach, the total tariffs imposed by the United States on Chinese goods now stand at 54%.
China’s retaliatory measures signal a potential widening of the trade war, especially since Trump has implemented reciprocal policies affecting around 60 countries.
The expansion of the trade conflict poses risks to global economic growth, which could adversely affect stock market indices. A slowdown in global economic growth may lead to decreased demand for oil, causing prices to plummet. In contrast, the demand for gold as a safe haven investment may rise.
