Midnight Shock: U.S. Slaps 104% Tariff on China, Stocks Plunge

The United States is set to impose a cumulative 104% tariff on Chinese imports, effective 12:01 a.m. ET on Wednesday, April 9, 2025. This significant escalation in trade tensions follows China's earlier imposition of a 34% tariff on American goods. 

The breakdown of the U.S. tariffs includes an initial 20% tariff, an additional 34% increase, and a new 50% raise implemented in direct response to China's actions. The Trump administration asserts that these measures aim to level the global trade playing field and encourage domestic manufacturing.

However, critics warn that such tariffs may primarily harm U.S. consumers and businesses by driving up costs and generating economic uncertainty. Major companies like Apple and Tesla, which rely heavily on manufacturing or assembling in China, are expected to be significantly affected. In response to the U.S. tariffs, China has vowed to "fight till the end," labeling the U.S. action as blackmail and refusing to back down. This stance reinforces the likelihood of a prolonged trade standoff with further economic repercussions.

The escalating trade war has also had a profound impact on financial markets.

The S&P 500 has entered correction territory, closing more than 10% down from its February 19 peak. On Thursday, March 13, 2025, the index closed at 5,521.52, marking its first correction in over a year. The Dow Jones Industrial Average and the Nasdaq Composite have also experienced significant declines, reflecting investor concerns over the potential for a global recession. As the tariff deadline approaches, global leaders are intensifying efforts to negotiate exemptions, with nearly 50 countries approaching the U.S. 

Trade Representative Jamieson Greer to discuss the new tariff policy. However, President Trump remains firm, with no delays or adjustments to the impending tariffs planned, though tailor-made deals may be considered on a country-by-country basis.

The situation remains fluid, with the potential for further developments as both nations navigate this escalating trade conflict.