Stock markets worldwide are careening even lower Friday after China matched US President Donald Trump’s big raise in tariffs in an escalating trade war. China’s response to US tariffs caused an immediate acceleration of losses in markets worldwide.
The Commerce Ministry in Beijing said it would respond to the 34% tariffs imposed by the US on imports from China with its own 34% tariff on imports of all US products beginning April 10. The United States and China are the world’s two largest economies.
The intensified trade conflict between the US and China accelerated a slide in the German DAX index on Friday afternoon.
With a drop of more than 1,000 points, or a good 5%, to a daily low of 20,590 points, the leading German index extended its weekly decline to around 8%, according to reports of German news agency dpa.
Tim Oechsner, a capital markets expert at Steubing AG, said this was emblematic of the current "high volatility".
European stocks saw some of the day’s biggest losses, with indexes sinking roughly 5%. The price of crude oil tumbled to its lowest level since 2021.
The largest Spanish stock market, IBEX35 (IBerian-indEX) also saw a fall of roughly 5% on Friday. In the middle stretch of trading, the IBEX35 took a nosedive, bringing it down to 12,500 points, as it was also dealt a crucial blow by the US-China led tariff war.
The Spanish selective index was the one that managed to weather the impact of the tariffs, which were announced on Wednesday night, in the best possible way, registering a fall of 1.2%, relatively minor in comparison with European counterparts which averaged 3%.
France similarly took a hit, with its largest market, the CAC 40 dropping about 4.3%, in what were the biggest weekly losses for European shares in years.
Leading the charge for European response, French President Emmanuel Macron urged all French companies to pause planned investments in the US.
Acting German Economy Minister, Robert Habeck, echoed the same sentiment, adding that Trump would “buckle under pressure” if Europe united together in its response.
France’s Finance Minister Eric Lombard however cautioned against tit-for-tat countermeasures on Washington’s tariffs, warning that this would also rebound on European consumers.
The European Union’s trade commissioner Maros Sefcovic said he held a two-hour call with US Secretary of Commerce Howard Lutnick and US Trade Representative Jamieson Greer.
“I was clear: US tariffs are damaging, unjustified,” said Sefcovic in a post on social media platform, X. “The Eu’s committed to meaningful negotiations but also prepared to defend our interests.”