U.S. financial markets faced a sharp decline after President Trump’s recent threats of new 50% tariffs on Chinese goods. This announcement has been a significant trigger for fluctuations in both stock and commodity markets.
Market Reaction to New Tariff Threats
Markets reacted negatively to President Trump’s announcement of imposing new tariffs. As of 8:56 PM on April 7, 2025, the Dow Jones Industrial Average fell by 1,019.51 points (-2.66%) to 37,295.35. The S&P 500 dropped by 104.08 points (-2.05%) to 4,970. The Nasdaq Composite lost 273.16 points (-1.75%) to 15,314.63. The VIX volatility index rose by 15.67%, indicating a level of 52.41. Oil prices also fell by 3.07% to $60.09 per barrel, while gold decreased by 1.07% to $3,002.90 per ounce.
Trump’s Trade War Escalation
President Trump escalated the trade war by threatening to impose 50% tariffs on Chinese imports if Beijing does not remove its retaliatory duties. This announcement caught many analysts off guard, as it significantly raises the stakes in ongoing trade negotiations. The White House has been actively responding to reactions from trade partners and affected industries. Local media termed the measures as 'historic tariffs' that complicate global trade.
Global Implications and Impact on Currency Markets
The escalation of trade tensions affected not only stock markets but also currency and bond markets. The U.S. Dollar Index strengthened by 0.22% to 103.25 as investors sought safe-haven assets. The euro weakened against the dollar, falling by 0.237% to 1.093, while the British pound decreased more significantly, dropping by 1.016% to 1.276. In bond markets, the yield on 10-year Treasury bonds rose by 0.101 percentage points to 4.092%, and the 30-year yield climbed by 0.154 percentage points to 4.544%.
Amid intensified trade tensions between the U.S. and China, global financial markets are experiencing high volatility. Following sharp declines in stock indices and shifts in currency values, investors remain watchful of the evolving situation.
