trump's 104% tariff: will it trigger a global recession?

2025-04-09 general

washington, Wednesday, 9 April 2025.
the trump administration’s move to impose a cumulative tariff of 104% on chinese goods has ignited fears of a global recession. the tariffs, which went into effect today, have already sent shockwaves through the stock market, with apple shares plummeting nearly 23% in four days. while over 70 countries are scrambling to negotiate, the long-term economic fallout remains uncertain, especially for crucial sectors like semiconductors. is this a calculated strategy or a step too far?

market turmoil and investor anxiety

The immediate impact of the tariffs has been a sharp downturn in global stock markets [4]. On April 8, 2025, stock futures plunged as the tariffs loomed, with the S&P 500 futures decreasing by 1.5%, the Dow Jones Industrial Average futures dropping 469 points (1.2%), and Nasdaq-100 futures declining 1.8% [2]. This follows a four-day rout where the Dow Jones lost over 4,500 points, the S&P 500 fell by 12%, and the Nasdaq Composite decreased by over 13% [2]. Such volatility reflects deep investor unease [4].

asia feels the brunt

Asian markets have borne the brunt of the tariff fallout [4]. On April 7, 2025, the Hang Seng Index experienced its largest single-day drop since the 1997 Asian financial crisis, plummeting 13.22% [4]. Other Asian markets also suffered, with the Nikkei 225 falling over 8% and Taiwan’s weighted index plummeting 9.7% [4]. Vanguard’s chief economist for Asia Pacific, Qian Wang, noted that Asia is absorbing the brunt of the increased tariffs imposed by the U.S. [4].

china’s defiant stance

China has adopted a firm stance, vowing to retaliate against the U.S. tariffs [5][6]. The Chinese Ministry of Commerce has criticized the U.S. tariff threats [6]. China’s Ambassador to the U.S., Liu Pengyu, stated that ‘pressure or threats are not the right way to deal with China’ [6]. Beijing has already indicated it will impose an additional 34% tariff in response [4]. This tit-for-tat escalation intensifies the trade conflict and diminishes hopes for a resolution [4].

expert opinions divided

Experts hold diverging views on the tariff strategy. Piper Sandler analyst Andy Laperriere suggests tariffs are likely to remain high, potentially increasing in the near term [2]. Conversely, some economists warn that these tariffs could trigger a significant economic downturn [6]. Erik Hirsch, co-CEO of Hamilton Lane, notes that while investors blame the U.S. government for the market downturn, many recognize the need to address trade imbalances, though the current approach is proving difficult for markets to digest [4].

potential paths forward

Despite the escalating tensions, some glimmers of potential de-escalation exist. Over 50 countries have approached the U.S. seeking negotiations [7]. Israel has pledged to reduce trade barriers following discussions with President Trump [7]. The EU has also offered to negotiate with the U.S. and proposed eliminating tariffs on industrial products [5]. However, Trump administration officials have signaled that any deals must substantially benefit U.S. manufacturing and farmers [7].

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china tariffs recession risk