US President threatens additional 50% tariff on China, as Beijing vows to fight trade measures ‘to the end.’
US stocks mostly closed lower after a day of extreme market volatility, as investors struggled to comprehend the implications of President Donald Trump’s tariff plans.
On Monday, the benchmark S&P 500 and Dow Jones Industrial Average declined by 0.23% and 0.91%, respectively, marking their third consecutive day of losses.
The tech-heavy Nasdaq Composite, however, ended slightly higher, rising by 0.099%.
This dip followed a day of erratic trading, during which unsubstantiated reports that Trump was considering a 90-day pause on tariffs briefly propelled the S&P 500 up by more than 7%.
The index quickly reversed its gains after the White House dismissed the report, which had been circulated on social media and picked up by numerous news outlets, as “fake news.”
US stock futures, which are traded outside regular market hours, hinted at a potential break from the losing streak on Tuesday, with contracts tied to the S&P 500 and Nasdaq rising by 0.98% and 1.02%, respectively.
After initially following Wall Street’s earlier losses, some Asian markets opened higher on Tuesday.
Japan’s benchmark Nikkei 225 surged nearly 6% in early trading.
Hong Kong’s Hang Seng gained over 2.3%, recovering from its steepest drop since the 1997 Asian financial crisis in the previous session.
South Korea’s Kospi and Australia’s ASX 200 each climbed approximately 1.5%.
However, stocks in Indonesia, Taiwan, and Vietnam opened sharply lower.
Despite the market turmoil and concerns voiced by top business leaders, Trump on Monday signaled his readiness to escalate the trade war further.
In a post on his platform Truth Social, Trump stated he would impose an additional 50% tariff on China starting Thursday unless Beijing abandoned its planned 34% retaliatory duty on US imports.
“Additionally, all talks with China concerning their requested meetings with us will be terminated!” Trump declared.
Speaking later at the White House, Trump criticized an EU proposal to exempt industrial products from tariffs as insufficient and clarified that his administration was “not looking” at any pause to the tariffs already announced.
China’s commerce ministry responded to Trump’s latest tariff threat on Tuesday, calling it a “mistake on top of a mistake.”
“China will never accept this,” a ministry spokesperson said.
“If the US insists on going its own way, China will fight it to the end,” the spokesperson added.
US customs authorities began implementing a baseline 10% tariff on imports on Sunday, with steeper duties ranging from 11% to 50% set to take effect against dozens of countries on Wednesday.
China, the US’s primary strategic rival and its third-largest trading partner, is facing a 34% tariff.
Several US allies are also preparing for potential disruptions to their export markets, with the European Union, Japan, and South Korea facing tariffs between 20% and 25%.
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