Trump's 100% China Tariff Threat Roils US Markets
Wall Street suffers its worst day since April as investors fear a renewed and escalated trade war with Beijing.
U.S. markets plunged on Friday following former President Donald Trump's announcement of a plan to impose a staggering 100% tariff on all Chinese imports, effective November 1. The news, which threatens to reignite a global trade war, sent a shockwave through equity markets, wiping out weekly gains and handing the S&P 500 its worst trading day since April.
The S&P 500 fell 2.7%, while the tech-heavy Nasdaq Composite dropped 3.6% and the Dow Jones Industrial Average slid 1.9%. The sell-off accelerated into the close as investors digested the implications of a severe escalation in trade hostilities. The sudden move was a response to what Trump described as China's "hostile trade moves," specifically recent restrictions on rare earth element exports, a critical component in many tech and defense applications.
In a post on his Truth Social platform, Trump stated he would levy the new duties on top of all existing tariffs. The aggressive stance rattled investors, with that the threat immediately erased the market's weekly advances. The broad-based decline signaled widespread concern over potential disruptions to global supply chains, rising consumer costs, and the prospect of retaliatory measures from Beijing.
China-focused investments were hit particularly hard. Exchange-traded funds (ETFs) that track Chinese equities, such as the iShares MSCI China A ETF (CNYA) and the SPDR S&P China ETF (GXC), all fell by more than 3%. The move comes at a sensitive time for the global economy, which is already grappling with persistent inflation and geopolitical uncertainty. According to , the tariff news also contributed to a downturn in the cryptocurrency markets, indicating a broad risk-off sentiment among investors. The market's sharp reaction underscores the significant economic stakes of a potential trade war between the world's two largest economies.