Market sell-off deepens following China’s retaliation against Trump tariffs
Stock markets worldwide are careening even lower Friday after China matched U.S. President Donald Trump’s big raise in tariffs in an escalating trade war. Not even a better-than-expected report on the U.S. job market, which is usually the economic highlight of each month, was enough to stop the slide.
The S&P 500 was down 2.8 per cent in early trading, coming off its worst day since COVID-19 wrecked the global economy in 2020. The Dow Jones Industrial Average was down 2.6 per cent, as of 9:35 a.m. ET, and the Nasdaq composite was 3.2 per cent lower.
Canada’s main stock index, S&P/TSX, had already fallen 2.96 per cent as of 9:40 a.m. ET.
So far, there are few, if any winners, in financial markets from the trade war. European stocks saw some of the day’s biggest losses, with indexes sinking more than 3.5 per cent. The price of crude oil tumbled to its lowest level since 2021.
Other basic building blocks for growth, such as copper, also saw prices slide sharply on worries the trade war will weaken the entire global economy.
China’s response to U.S. tariffs caused an immediate acceleration of losses in markets worldwide. The Commerce Ministry in Beijing said it would respond to the 34 per cent tariffs imposed by the U.S. on imports from China by imposing a 34 per cent tariff on imports of all U.S. products beginning April 10.
The United States and China are the world’s two largest economies.
Better-than-expected jobs report
Markets recovered some of their losses following Friday morning’s U.S. jobs report, which said employers accelerated their hiring by more last month than economists expected. It’s the latest signal the U.S. job market has remained relatively solid through the start of 2025, and it’s been a linchpin keeping the economy out of a recession.
But that jobs data was backward-looking, and the fear hitting financial markets is about what’s to come. Will the trade war cause a global recession? If it does, stock prices will likely need to come down even more than they have already. The S&P 500 is down nearly 15 per cent from its record set in February.
CBC host Ian Hanomansing speaks with a chief market strategist following Trump’s tariff shock
Much will depend on how long Trump’s tariffs stick and what kind of retaliations other countries deliver. Some of Wall Street is still holding onto hope Trump will lower the tariffs after negotiating with other countries to pry out some “wins.” Otherwise, many say a recession looks likely.
For his part, Trump has said Americans may feel “some pain” because of tariffs, but he has also said the long-term goals, including getting more manufacturing jobs back to the United States, are worth it. On Thursday, he likened the situation to a medical operation, where the U.S. economy is the patient.
“For…
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