U.S. President Donald Trump’s sweeping new tariffs officially came into force on Wednesday, escalating tensions in the global trade arena. Among the most striking measures is a 104% tariff on Chinese goods, part of a broader campaign of “reciprocal” duties targeting dozens of countries.
The tariffs have rattled international markets and upended decades of established trade norms. The resulting uncertainty has raised fears of a looming global recession, with markets reacting sharply.
The S&P 500 has lost nearly $6 trillion in value since the tariffs were unveiled a week ago, marking the worst four-day decline since the index’s inception in the 1950s. It is now approaching bear market territory.
Asian markets continued to slide on Wednesday. Japan’s Nikkei index fell over 3%, South Korea’s currency hit a 16-year low, and government bonds saw heavy sell-offs as investors rushed to cash. Meanwhile, U.S. stock futures pointed to a fifth consecutive day of losses on Wall Street.
Despite the market chaos, Trump has given conflicting messages about the permanence of the tariffs. While he has labeled them as “permanent,” he also emphasized they are a tool to bring countries to the negotiating table.
“We have a lot of countries coming in that want to make deals,” Trump said at a White House event Tuesday. He added that he expected China would eventually seek an agreement as well.
Negotiations are scheduled with key allies, including South Korea and Japan. Italian Prime Minister Giorgia Meloni is expected to visit next week, and Vietnam’s Deputy Prime Minister is set to meet with Treasury Secretary Scott Bessent later today—Vietnam being one of the countries hardest hit by the new duties.
Although hopes for trade deals had briefly lifted markets on Tuesday, optimism faded by the end of the trading day.
In response to the U.S. action, China vowed to fight back, calling the tariffs an act of economic blackmail. Major Chinese brokerages have pledged to collaborate to stabilize domestic stock markets amid the financial fallout.
Other nations are scrambling to protect vulnerable industries. South Korea announced emergency support for its auto sector, including tax cuts and subsidies.
Economists warn that American consumers could ultimately bear the cost, with higher prices expected on a wide range of goods, from sneakers to wine.
