"China played it wrong, they panicked -- the one thing they cannot afford to do!" Trump posted on Truth Social, writing the message in his trademark all-caps.
For a second day, markets plunged, wiping vast sums off investment and retirement portfolios alike. US Federal Reserve Chairman Jerome Powell warned the tariffs were likely to spur "higher inflation and lower growth."
Wall Street saw prolonged selloffs, both the Dow Jones and S&P 500 losing close to four percent. Frankfurt and London sank more than four percent, while Tokyo's Nikkei closed 2.8 percent down.
Trump, who unveiled his barrage of import duties against dozens of countries Wednesday, was unrepentant, posting that "my policies will never change."
"This is a great time to get rich," he wrote.
The 78-year-old Republican, who was spending a long weekend golfing at his course in Palm Beach, Florida, is banking on the theory that the might of the world's biggest economy will force foreign companies to manufacture on US soil, rather than continue to import goods.
However, China responded by announcing its own new 34 percent tariffs on US imports starting April 10.
Beijing said it would sue the United States at the World Trade Organization and also restrict export of rare earth elements used in high-end medical and electronics technology.
Other big US trading partners have held back as they digest the unfolding international standoff and fears of recession.
EU trade chief Maros Sefcovic said the EU, which Trump hit with a 20 percent tariff, will act in "a calm, carefully phased, unified way" and allow time for talks.
However, he also warned the bloc "won't stand idly by, should we be unable to reach a fair deal."
- EU examines options -
France and Germany have said the 27-nation EU could respond by imposing a tax on US tech companies.
Economy Minister Eric Lombard urged French companies to show "patriotism" after President Emmanuel Macron argued it would send the wrong message if they pressed ahead with investments in the United States.
Lombard said the EU's retaliation would not necessarily involve tit-for-tat tariffs and could use other tools, pointing to data exchange and taxes instead.
In Tokyo, Prime Minister Shigeru Ishiba called for a "calm-headed" approach after Trump slapped 24 percent tariffs on Japanese-made goods.
Trump said he'd had a "very productive" call with Vietnam's top leader after the southeast Asian manufacturing hub was hit with extraordinary 46 percent US duties.
- Cars clash -
Separate US tariffs of 25 percent on all foreign-made cars went into effect this week, and Canada swiftly responded with a similar levy on US imports.
Stellantis -- the owner of Jeep, Chrysler and Fiat -- paused production at some Canadian and Mexican assembly plants.
Japanese carmaker Nissan said on Friday it would revise plans to reduce production in the United States.
The company also said it would stop selling two vehicle models on the US market that are made in Mexico.
Sweden's Volvo Cars, owned by China's Geely, said it would increase its production of vehicles in the United States and probably produce an additional model there.
- Economy fears -
Powell's comments Friday reflected growing concern that the trade war shockwaves will extend deep into the US economy.
"It is now becoming clear that the tariff increases will be significantly larger than expected," Powell said in a speech. "The same is likely to be true of the economic effects."
Minutes before Powell suggested the Fed will continue to hold off from cutting its benchmark lending rate, Trump pressured him to do so.
"CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!" he posted -- once again defying the longstanding custom in which the White House respects the central bank's independence.
In a more concrete sign of how tariffs are impacting trade, Nintendo announced it was delaying preorders of its hotly anticipated Switch 2 gaming console while it assesses "evolving" conditions.
Stocks, oil slump as China retaliates and Trump digs in heels
New York (AFP) April 4, 2025 -
Equities and oil prices extended a global rout for markets Friday after China hit back over President Donald Trump's tariff blitz with its own mammoth levy on US goods, inflaming international trade war fears.
The Chinese government said Friday it would impose an additional 34 percent tariffs on all imports of US goods, making it the first major nation to unveil retaliatory measures.
Despite the market turmoil, Trump insisted that "my policies will never change" and urged the US Federal Reserve to cut interest rates.
Meanwhile, Wall Street stocks endured another bruising round of selling, with the S&P 500 sinking six percent and the Nasdaq falling into a bear market, defined as a 20 percent drop from a recent high.
"We've essentially got an escalating trade war," said Jack Ablin of Cresset Capital. "We're at the beginning of a global slowdown if these tariffs remain in place."
The losses increased somewhat following remarks from Federal Reserve Chair Jerome Powell on Friday, who warned of the risk of higher unemployment and higher inflation due to tariff increases he characterized as "significantly larger than expected."
Wall Street investors shrugged off data showing the US economy added 228,000 jobs last month, much higher than analysts expected.
"Sentiment is so fragile right now," Chris Beauchamp, chief market analyst at online trading platform IG, told AFP.
"Investors are firmly in the 'get me to cash now' phase, on fears that other nations will follow China's lead, and of course that the US president will respond to China's tariffs with even more charges," he said.
"This trade war is like nothing we've seen for years, perhaps decades."
European markets ended the day sharply lower, with Frankfurt and London sinking nearly five percent.
The dollar rebounded against the euro and pound, having fallen sharply Thursday on fears of a recession in the United States.
But oil futures plummeted around seven percent, having already plunged some six to seven percent Thursday on the prospect of weaker demand.
News that OPEC+ had unexpectedly hiked crude supply more than planned added to the heavy selling.
The price of copper -- a vital component for energy storage, electric vehicles, solar panels and wind turbines -- also fell sharply.
Beijing on Friday also imposed export controls on seven rare earth elements, its commerce ministry said, including gadolinium -- commonly used in MRIs -- and yttrium, utilized in consumer electronics.
"Another jolt of fear has shot through markets as China's threat of retaliation has materialized," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
"The big concern is that this is a sign of a sharp escalation of the tariff war which will have major implications for the global economy," she said.
- Key figures around 2050 GMT -
New York - Dow: DOWN 5.5 percent at 38,314.86 (close)
New York - S&P 500: DOWN 6.0 percent at 5,074.08 (close)
New York - Nasdaq Composite: DOWN 5.8 percent at 15,587.79 (close)
Frankfurt - DAX: DOWN 5.0 percent at 20,641.72 (close)
Paris - CAC 40: DOWN 4.3 percent at 7,274.95 (close)
London - FTSE 100: DOWN 5.0 percent at 8,054.98 (close)
Tokyo - Nikkei 225: DOWN 2.8 percent at 33,780.58 (close)
Hong Kong - Hang Seng Index: Closed for a holiday
Shanghai - Composite: Closed for a holiday
West Texas Intermediate: DOWN 7.4 percent at $61.99 per barrel
Brent North Sea Crude: DOWN 6.5 percent at $65.58 per barrel
Euro/dollar: DOWN at $1.0962 from $1.1052 on Thursday
Pound/dollar: DOWN at $1.2893 from $1.2968
Dollar/yen: UP at 146.98 yen from 146.06 yen
Euro/pound: DOWN at 85.01 pence from 85.22 pence
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