Trump Tariffs Highlights: US consumer sentiment plummets to 1952 levels as trade war with China continues to escalate

The U-turn came less than 24 hours after steep new tariffs took effect on most trading partners, lifting the S&P 500 to its biggest single-day percentage gain since 2008. The Nasdaq posted its biggest one-day jump since 2001. Despite Wednesday’s surge, the S&P 500 and the Dow are about 4% below levels seen before the reciprocal tariffs were announced last week.

“The trade war is now turning into a direct confrontation between the U.S. and China… we could again be seeing escalation and de-escalation at the same time, pulling markets in different directions,” Rabobank analysts said.

At 04:55 a.m. ET, Dow E-minis were down 658 points, or 1.61%, S&P 500 E-minis were down 117.75 points, or 2.14% and Nasdaq 100 E-minis were down 503.5 points, or 2.61%. Most megacap and growth stocks slid in premarket trade after recording stellar gains in the last session, with Tesla sliding 4.5% and Nvidia down 3.8%.

The prime ministers of Japan and the United Kingdom discussed the tariffs over a telephonic conversation, MKTNews reported.

The 10 countries that make up ASEAN said they will not take revenge or respond with their own tariffs to the ones announced by the US, reported CNBC. Instead, they plan to have open and honest talks with Washington about trade. In a statement, the group said they see the U.S. as an important and trusted economic partner. They also said they are committed to protecting their own economic interests while keeping strong and beneficial trade ties with the US. ASEAN includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

European stock markets opened strong on Thursday, with the Stoxx 600 index rising by 7.25% by 8:21 a.m. in London, reported Reuters. Every sector saw gains at the start of the trading day. Banks led the way with a jump of 9.95%, followed by the auto sector at 7.43% and health care at 7.41%.

China has made it clear that it does not want a conflict but will not back down if the United States continues to push ahead with its tariff threats. Responding to questions about the U.S. tariff actions on Thursday, Chinese foreign ministry spokesperson Lin Jian put spotlight on China’s firm stance. “The US cause doesn’t win the support of the people and will end in failure,” he said during a regular press briefing. Lin also stressed that China will not stand by while the rightful interests and rights of its people are taken away.

A research report by CLSA says that US tariffs will make it more expensive to ship Apple products, which could lead to higher prices in stores, MKTNews reported. It also says that companies that supply parts to Apple may earn less profit because they won’t be able to run as efficiently. However, since these suppliers already have low profit margins, they likely won’t have to pay the extra tariff costs themselves.

Stock markets in Asia’s emerging markets went up sharply on Thursday — the biggest increase in over two years. At the same time, their currencies became stronger, reported Reuters. This happened after US President Donald Trump announced a temporary pause on tariffs on Wednesday. This gave investors hope that the trade situation might improve, so they started buying stocks that had fallen a lot during the trade tensions — these stocks are called “beaten-down stocks.”

Base metals in London climbed on Thursday as market sentiment improved after US President Donald Trump announced a temporary pause on the recently imposed hefty tariffs on several countries. The benchmark three-month copper on the London Metal Exchange (LME) rose by 3.5% to $8,919 per metric ton as of 0742 GMT.

LME copper had previously fallen 12% from its nine-month high of $10,164.50, reached on March 26, before trade tensions between the U.S. and China escalated.

China has banned 12 US entities, including American Photonics, in the export control list.

“The export of dual-use items to the aforementioned 12 US entities is prohibited; relevant export activities that are underway shall be immediately stopped. In special circumstances where export is indeed necessary, the export operator shall submit an application to the Ministry of Commerce,” Chinese government read.

Banned US companies

American Photonics

Novotech, Inc.

Echodyne

Marvin Engineering Company, Inc.

Exovera

Teledyne Brown Engineering, Inc.

BRINC Drones, Inc.

SYNEXXUS, Inc.

Firestorm Labs, Inc.

Kratos Unmanned Aerial Systems, Inc.

Domo Tactical Communications

Insitu, Inc.

Responding to President Trump’s decision to raise tariffs on Chinese goods to 125%, China’s Foreign Ministry stated that while the country is not seeking confrontation, it will not hesitate to respond if the United States continues its tariff threats.

“China does not seek a trade war, but it is not afraid of one,” said ministry spokesperson Lin Jian at a regular press briefing. “The U.S. cause lacks public support and is doomed to fail.”

Lin added that China would not remain passive if the legitimate rights and interests of the Chinese people are threatened.

China’s Commerce Ministry has reiterated its stance that there are no winners in a trade war, and that protectionism leads nowhere, reported Reuters. It again stated firmly that China will never accept extreme pressure or bullying tactics from the United States. The Ministry said that any dialogue must be based on principles, and all consultations must have a clear bottom line. It stressed that using pressure, threats, or blackmail is not the right approach when dealing with China. While the door to dialogue remains open, it must be built on mutual respect and equality. The Ministry also affirmed that China’s position on trade matters is clear and consistent. Despite external challenges, China remains confident in its ability to handle various risks in foreign trade.

The Chinese Foreign Ministry has firmly stated that China will not remain quiet while the legitimate rights and interests of its people are taken away. It said that China will also not allow the rules of international trade and the multilateral system to be weakened. While China does not seek conflict, it will not back down if confrontation is brought to its doorstep, the ministry said in a statement, reported Reuters. The Ministry added that the actions taken by the United States lack public support and are bound to fail. China’s decision to take further countermeasures is not only a response to what it calls US bullying but also a necessary step to safeguard its sovereignty, security, and development interests.

Greek Prime Minister Kyriakos Mitsotakis said in an interview that Europe and the United States have a chance to agree on a trade deal that would benefit both sides, reported Reuters. His comments came after a surprising move by Trump, who announced a 90-days pause in the tariffs, while simultaneously increasing pressure on China. This shift boosted global stock markets.

As per Reuters report, Swiss Economy Minister has said that the reduced tariff situation with the US is a better situation for them than what they were in before. The minister also said, “it’s never easy to have to cope with tariffs”.

Even though the trade war between US and China is ongoing, Donald Trump did say some positive things about Chinese President Xi Jinping while speaking to reporters in the Oval Office on Wednesday night. “Xi is a smart guy and we’ll end up making a very good deal,” Trump said, calling Xi “one of the smartest people in the world.” Further praising the Chinese president, Trump said that Xi is a man “who knows exactly what has to be done, he loves his country”. He further added that they will get to the point of having a conversation over a phone call soon.

European Commission President Ursula von der Leyen on Thursday said she welcomed US President Donald Trump’s decision to pause the reciprocal tariffs. In a post on X, she said trade and supply chains need clear and stable rules to work properly. She also said tariffs act like taxes that end up harming both businesses and customers. That’s why she has always supported a deal between the EU and the US to remove tariffs from both sides.

Jeffrey Cleveland, the director and chief economist at investment firm Payden & Rygel, told BBC Radio 4’s Today programme that while the situation in the bond market has slightly improved, challenges still persist. He explained that ongoing uncertainty is making it harder for businesses to invest and make clear decisions, which is slowing things down overall. The economist said, “we’re off the ledge but we’re not out of the woods.”

According to MKTNews, Eurostoxx 50 Futures is set for one of the biggest one-day surge since March 2020. This comes amid Trump’s 90-day pause on tariffs on almost all nations, except China.

Commerce Minister Piyush Goyal has reassured the Indian exporters that the country is working towards the “right mix and right balance” in its proposed free trade agreement with the US. Goyal also said that India is working fast but without undue haste to ensure the best for the country.

A BBC report said that a large portion of China’s exports used to go to the US, but due to the current high tariffs, those goods will now need to find new markets. This situation is creating a major diplomatic and political challenge for China’s leaders. According to The Economist’s geopolitics editor David Rennie, who recently spoke with officials and experts in Beijing, China is worried that redirecting its exports could upset other countries, reported BBC. If Chinese goods flood markets in Europe, Latin America, or other parts of the Global South, it could hurt local industries and jobs in those regions. This shift could lead to frustration and pushback from China’s international partners, making it harder for the country to maintain good relationships.

China’s exports are expected to face major challenges, even if the local economy starts to improve before big government support kicks in, Wenli Zheng, a fund manager at T. Rowe Price tells MKTNews. Zheng also pointed out that China now has more room to adjust its policies. The focus on supporting domestic demand isn’t just because of US tariffs—it’s part of a longer-term shift that will likely continue over the next 1 to 2 years, reported MKTNews.

According to Citi analysts, the US-China tariff war is unlikely to cause further damage to trade as the current tariffs are at “prohibitive” levels, the MKTNews reported. However, if tensions don’t ease, there’s still a risk that the impact could spread to other areas. The analysts said they are worried that real talks between the two countries might not happen soon enough to stop serious harm. They added that China’s efforts to steady its stock and currency markets could help reduce investor fear.

Earlier this week, the Goldman Sachs had said that there was a 65% chance the US economy would shrink this year. Now, it has gone back to its older prediction, saying the chances of that is actually 45%. JPMorgan has now said that it would review its prediction in the coming days. After President Trump announced a 90-day pause on higher tariffs for most countries, JPMorgan said a US recession is now harder to avoid.

A trade ministry official from Japan has said that they will continue to urge the US government to exempt them from aluminium and steel tariffs, MKTNews reported. The official also said that they would consider taking action on Chinese steel import if any kind of unfair trade practice is identified under the WTO rules.

As Trump announced a 90-day pause on tariffs, the Global Trade Research Initiative (GTRI) has advised India that it should avoid entering into a full Free Trade Agreement (FTA) with the United States. According to GTRI, such a deal could lead to trade compromises that may harm India’s economy more than benefit it, reported ANI.

Billionaire Bill Ackman took to X and hailed trump’s tariff strategy saying that his focus is on results and not on “how the sausage is made”. He said that China is now isolated and other trading partners are lining up to make deals with the US. Full post here:

China’s 84% retaliatory tariffs on all US goods has come into effect. China’s top leaders are reportedly planning to meet on Thursday to talk about new ways to support the economy after Trump raised tariffs to 125%. The meeting might focus on helping the housing market, increasing consumer spending, and encouraging new technology, as per MKTNews said. Other government groups, including financial regulators, will also meet to find ways to boost the economy and keep markets steady, though the timing of those meetings might change.

European Union is contemplating to buy more gas from the US due to US President Donald Trump’s tariff pressure, a report by Financial Times said.

China’s consumer prices dropped for the second month in a row in March, while prices at factories also fell more sharply, Reuters reported. This happened as the trade war with the US got worse, raising concerns that unsold goods might pile up and push prices down even further at home. The Chinese economy has had a rough start this year. Even though there’s been a slight rise in retail sales and strong factory activity, these positives have been overshadowed by rising unemployment and falling prices, the report said. This has led to growing calls for the government to introduce more economic support. According to the National Bureau of Statistics, China’s consumer price index (CPI) in March fell by 0.1% compared to the same time last year. Although this drop was smaller than February’s 0.7% decline, it was still worse than expected.

20 January: During his inauguration speech, Trump outlined his plans to change the trade system to “protect American workers” and proposed tariffs on foreign countries to benefit the citizens of the US.

1 February: Trump announces a 25% tariff on imports from Canada and Mexico and an additional 10% tariff on imports from China.

3 February: Canada and Mexico reach a deal with the US to pause tariffs for one month.

10 February: Trump introduces a 25% import tax on all steel and aluminium entering the US.

4 March: The White House adds another tariff specifically targeting Chinese imports.

12 March: The 25% tariffs on steel and aluminium officially take effect.

26 March: Trump announces new 25% tariffs on cars and car parts, set to begin on 2 April.

2 April: Trump announces “reciprocal tariffs” on certain countries and a universal 10% tariff on imports from all other nations.

5 April: The 10% “baseline” tariff comes into effect.

9 April: Custom tariffs are applied to imports from around 60 countries considered as the worst offenders. Trump announced a 90-day pause on tariffs for all countries except China. Although the 10% universal tariff are still in place. Tariffs on Chinese imports are raised to 125%.