China retaliates fiercely, US market plummets.

(CLO) The US market is facing its worst crisis since the COVID era after China retaliated aggressively against President Donald Trump's new tariff policies, including reimposing a 34% tariff on US goods.

China reimposes a 34% tariff.

China launched a series of swift and forceful countermeasures on Friday, including export controls on rare earth elements and the imposition of new tariffs, in response to the latest round of tariffs imposed by the U.S. administration.

In a joint statement, China's Ministry of Commerce and General Administration of Customs announced an immediate export ban on seven medium-to-heavy rare earth elements – namely samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium.

Specifically, China imposed an additional 34% tariff on all imports originating from the United States starting April 10th, with the approval of the State Council of China, i.e., the Chinese government .

China has taken strong countermeasures against the new US tariff policy. Photo: CD

China has also added 16 entities from the US, including High Point Aerotechnologies and Universal Logistics Holdings Inc., to its "unreliable" list for export control purposes.

Under the new regulations, Chinese companies are prohibited from exporting dual-use items to these 16 U.S. entities. The Chinese Ministry of Commerce stated that any ongoing related exports must cease immediately.

A seismic shock for the US market, losing over $5 trillion.

Following China's strong retaliatory move, the Dow Jones, S&P 500, and Nasdaq all recorded their biggest two-day declines since the COVID-19 pandemic erupted in 2020, causing global panic during US President Donald Trump's first term.

Specifically, the S&P 500 index fell 6% on Friday and more than 10% in the past few days. The index's market capitalization has dropped $5 trillion in just two days. On Thursday and Friday, the Dow Jones fell 9.3% and the Nasdaq fell 11.4%. The CBOE Volatility Index, a measure of Wall Street fear, closed at its highest level since April 2020.

The Wall Street market is plummeting. Photo: GI

Shares of Chinese companies listed in the US also plummeted, with JD.com, Alibaba, and Baidu all falling more than 7.7%. Companies with ties to China also declined broadly, with large-cap companies like Apple dropping 7.3%.

The chipmaker index fell 7.6%, after a 9.9% drop the previous day. The industry is particularly vulnerable to double tariffs because many chip companies design their chips in the United States but manufacture them in China.

Risk of global recession

Since late Wednesday, when Trump raised tariffs to their highest level in more than a century, investors have been selling off stocks, fearing both the new economic realities and how U.S. trading partners might retaliate by increasing their own trade barriers.

A record number of shares were traded on Friday, with trading volume on US exchanges reaching approximately 26.79 billion shares, surpassing the previous high of 24.48 billion shares traded on January 27, 2021.

Countries around the globe are beginning to react to Trump's tariff announcement, further undermining investor sentiment that a global recession can be averted. JP Morgan said it forecasts a 60% chance that the global economy will enter a recession by the end of the year, up from 40% previously.

Federal Reserve Chairman Jerome Powell spoke publicly for the first time since Trump's tariff announcement. Powell stressed that the unexpectedly high tariffs could lead to higher inflation and slower growth, setting the stage for challenging decisions for the U.S. central bank.

Hoang Huy (according to ChinaDaily, DW, Reuters)

Source: https://www.congluan.vn/trung-quoc-dap-tra-quyet-liet-thi-truong-my-lao-doc-khong-phanh-post341531.html