U.S. and global stocks plunge for second straight day; China hits back with 34% tariffs as recession worries mount amid Trump’s aggressive trade moves.
April 4 – Washington DC — The stock market continued its downward spiral on Friday as investor anxiety deepened over the economic fallout of President Donald Trump’s sweeping import tariffs. The selloff worsened after China retaliated with a blanket 34% tariff on American goods, raising the specter of a full-blown trade war between the world’s largest economies.
The S&P 500 dropped 2.5% at market open, adding to Thursday’s 4.84% plunge — its worst single-day loss since the 2020 pandemic-era crash. The downturn hit major media and tech giants hard, including Disney (-3.5%), Apple (-3.6%), Amazon (-4.8%), Roku (-6.5%), Warner Bros. Discovery (-6.4%), Sony (-5.2%), and Netflix (-2.2%).
The volatility was triggered by Trump’s new tariff policy, which goes into effect on April 9 and imposes a 10% baseline tax on imports from all countries. Certain countries, including China (34%), Japan (24%), South Korea (25%), Taiwan (32%), and the EU (20%), will face even steeper rates.
China, the third-largest export market for the U.S., responded swiftly. In a statement, the Chinese Finance Ministry called the U.S. action “a typical unilateral bullying practice” that violates international trade norms.
On his Truth Social account, Trump struck a defiant tone, writing: “CHINA PLAYED IT WRONG, THEY PANICKED – THE ONE THING THEY CANNOT AFFORD TO DO!”
Despite the turbulence, Trump told reporters Thursday outside the White House that “the markets are going to boom… the country is going to boom.” He later flew to his Florida golf club.
Economists, however, warn of a very different outcome. The potential for a recession looms large, as rising import costs could tighten consumer wallets and reduce discretionary spending — hitting sectors like media, tech, and entertainment particularly hard. Advertisers may also scale back budgets, further impacting platforms that rely on ad revenue.
In a separate development, Trump hinted he could lower tariffs on China if the country greenlights a sale of TikTok, adding a new wrinkle to the ongoing tensions. “Maybe they want to get something… in order to get TikTok approved,” he suggested while speaking aboard Air Force One.
As global markets brace for further instability, all eyes are now on how U.S.-China relations unfold in the coming weeks — and whether a resolution can be reached before economic damage becomes widespread.