Trump Tariff Chaos: Stock Market Plunges in Record Two-Day Wipeout After China Retaliates With 34% Levy on U.S. Products
Stocks dropped sharply for a second day — with U.S. stock markets setting a two-day record for losses — on continued fears that President Trump’s sweeping tariffs would ignite a massive trade war and lead to an economic recession.
On Friday the S&P 500 closed down 5.97% and the Dow Jones Industrial Average shed 2,231.07 points, down 5.5%, both the biggest single-day declines since June 2020 during the COVID pandemic. The Nasdaq Composite dropped 5.8%, pushing the tech-centric index into bear-market territory as it has fallen more than 20% from a high in December 2024.
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In the last two days, the U.S. stock market has lost $6.6 trillion in value, according to Dow Jones Market Data. That beat the previous record, set over March 11-12, 2020, when the markets lost $4.4 trillion in value.
Fueling to the stock downward spiral: The Chinese government announced Friday a blanket 34% tariff on American products, effective April 10. China is the second-largest importer of goods to the U.S. (after Mexico) and the country is the third-biggest export market for the U.S., after Canada and Mexico.
Major media and tech stocks that saw declines again Friday included Disney (-6%), Apple (-7.3%), Amazon (-4.15%), Roku (-8.3%), Warner Bros. Discovery (-11.9%), Sony (-6.7%) and Netflix (-6.7%).
The Trump tariffs set a 10% baseline levy on imports from all countries, with higher rates for certain regions and countries including China (34%), South Korea (25%), Japan (24%), Taiwan (32%) and the European Union (20%). The 10% tariffs take effect April 5 and the higher duties on April 9.
In a statement Friday, China’s Finance Ministry said, “This practice of the U.S. is not in line with international trade rules, seriously undermines China’s legitimate rights and interests, and is a typical unilateral bullying practice.” On his Truth Social social media platform, Trump posted Friday morning, “CHINA PLAYED IT WRONG, THEY PANICKED – THE ONE THING THEY CANNOT AFFORD TO DO!”
Trump also posted Friday, “TO THE MANY INVESTORS COMING INTO THE UNITED STATES AND INVESTING MASSIVE AMOUNTS OF MONEY, MY POLICIES WILL NEVER CHANGE.”
While the Trump tariffs will not impose direct cost increases on Hollywood, analysts say rising costs and a potential recession would lead consumers to cut their discretionary spending on media and entertainment and prompt marketers to scale back advertising budgets.
Trump spoke briefly with reporters Thursday outside the White House about the effects of his tariff plan. “I think it’s going very well,” Trump said. “The markets are going to boom, the stock is going to boom, the country is going to boom.” He then departed D.C. to fly to one of his Florida golf clubs.
Also Thursday, Trump against suggested that he would consider reducing tariff rates on China if the country approved a sale of TikTok. “I think that maybe China will call and say, ‘Well, we’re upset with the tariffs,’ and maybe they want to get something a little bit in order to get TikTok approved,” Trump told reporters on Air Force One. On Friday Trump said he is extending the deadline by another 75 days for TikTok’s parent ByteDance to reach a deal to sell control of the app to non-Chinese owners (despite the fact he does not technically have authority to postpone enforcement of the U.S.’s TikTok-targeted law).
Ahead of the new tariffs taking effect, U.S. consumers are rushing to buy products subject to the higher levies like HDTVs and workout apparel as well as stocking up on groceries, the Wall Street Journal reported.
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