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U.S. tariff war rattles markets, but Trump upbeat

Share markets across the world Friday April 04, 2025 crashed further a day after U.S. President Donald Trump announced, what he called, Reciprocal Tariffs, on multiple countries including India and China

Friday April 4, 2025 4:45 PM, ummid.com News Network

Mumbai: Share markets across the world Friday April 04, 2025 crashed further a day after U.S. President Donald Trump announced, what he called, Reciprocal Tariffs, on multiple countries including India and China.

Trump also called Wednesday April 02, 2025 –the day the tariffs announced by him took into effect, as the “Liberation Day” for the American economy.

The markets were already in red since last two days as Trump prepared his liberation day tariff announcement Wednesday.

Continuing the downturn, the Indian benchmark indices, BSE Sensex and NSE Nifty, opened lower on Friday. According to the latest market update, Sensex tumbled over 1,000 points whereas Nifty traded below 23,000 Friday.

The mid and small-cap segments are under sharp selling pressure. The BSE MidCap index is down 996 points (2.38%) at 40,799.28, and the BSE SmallCap index has fallen 1,215 points (2.56%) to an unspecified level. Of the 2,765 stocks traded on the NSE, 2,214 ended in the red, with only 499 in the green and 52 unchanged, reflecting a broadly bearish market sentiment.

Japan’s Nikkei sank 3% and Wall Street recorded its steepest single-day percentage drop since 2020 as broad tariff announcements stoked fears of a global recession and trade was.

Donald Trump’s Tariff War

In a much awaited announcement Wednesday Donald Trump imposed 10% baseline tariff on all goods entering the United States effective April 05, 2025.

Trump also announced a punishing tariff of 34% on China – the maximum imposed on any country. With this, the Chinese export to U.S. will have a total duty of 54% - 20% existing and 34% new, from April 09, 2025.

As for the other countries, Trump announced 26% tariff on goods imported from India, 20% on the European Union, 24% on Japan (24%), 46% on Vietnam (46%), and 49% on Cambodia.

Moreover, Trump also announced 25% tariff on foreign-made automobiles effective from April 3, alongside existing levies on steel, aluminum, and select goods from Canada and Mexico.

Trump Upbeat

The market downturn continued for the second day even a Donald Trump hoped his decision will revive the American economy and will make the country great again.

Trump claimed these tariffs will boost U.S. manufacturing and reduce the trade deficit (pegged at $1.2 trillion in 2024).

The immediate market response however suggests investors are bracing for short-term pain, with companies like Apple and Nike already contributing to the S&P 500’s slide due to their reliance on affected supply chains.

For the Indian market, Trump’s tariff announcement aggravates global economic jitters, with export-oriented sectors like IT (already down 4.2% yesterday) facing additional pressure from a potential U.S. slowdown.

The Indian rupee’s value and the country’s trade balance could also shift if the U.S. dollar strengthens further, as some predict post-tariff implementation.

Trump calls for negotiations, China unfazed

Trump, meanwhile, indicated some openness to making deals on tariffs, including working with China on a deal involving the sale of TikTok, in response to questions from reporters on Air Force One a short time ago, according to CNN.

“Every country has called us. That’s the beauty of what we do, we put ourselves in the driver’s seat,” Trump told reporters Thursday.

Trump said he was open to discussions with other countries, “as long as they are giving us something that’s good.”

He then named TikTok as an example, suggesting China might help secure a sale in exchange for tariff relief.

Refusing to bow to Trump's pressure tactics and "blackmailing" China Friday imposed additional tariffs of 34% on all U.S. goods, effective April 10, 2025.

China also said it had filed a lawsuit with the World Trade Organization (WTO) over sweeping US tariffs imposed on its exports. "China has filed a lawsuit under the WTO dispute settlement mechanism," Beijing's commerce ministry said in a statement.

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