Thu Apr 10 23:10:00 UTC 2025: **US Stock Market Plunges After White House Clarifies Massive China Tariffs**
New York, NY (CNN) – The US stock market experienced a dramatic downturn on Thursday, plummeting after the White House clarified its plan to impose a staggering 145% tariff on goods imported from China. This clarification significantly escalated the ongoing trade war between the two economic giants.
The Dow Jones Industrial Average fell 1,015 points (2.5%), recovering somewhat from a midday drop of over 2,100 points. The S&P 500 and Nasdaq Composite also suffered substantial losses, declining 3.46% and 4.31%, respectively. This sharp reversal followed Wednesday’s record-breaking gains for both indices.
The White House’s announcement of the 145% tariff, which combines a previously existing 20% tariff with the recently announced 125% “reciprocal” tariff, sent shockwaves through the market. Beijing swiftly retaliated by implementing its own 84% tariffs on US imports.
While President Trump had temporarily rescinded some tariffs on other countries, economists warn that the economic damage is already substantial and the risk of a US and global recession remains high. Gold prices surged to a record high, reflecting investor anxieties. The US dollar also weakened, hitting its lowest level since October.
Despite some positive reactions in global markets following the temporary pause in certain tariffs, and statements from the EU expressing hope for a negotiated agreement, the overall sentiment remains pessimistic. The CBOE Volatility Index, a measure of market fear, spiked, indicating significant investor uncertainty.
Although the March inflation data showed a slowdown, analysts emphasized that this older data doesn’t reflect the impact of the recent tariffs on consumer prices. Both Goldman Sachs and JPMorgan maintained their recession probability forecasts, with JPMorgan still predicting a 60% chance of a US and global recession.
Despite calls from billionaire investors like Ray Dalio urging President Trump to de-escalate the trade conflict, the heightened tariffs on Chinese goods suggest that a resolution remains elusive. China stated its willingness to negotiate but warned against further escalation. The bond and oil markets also showed signs of stress.
However, markets outside the US showed resilience, with several Asian and European indices closing significantly higher, reflecting some hope that the temporary tariff pauses may pave the way for a more constructive trade dialogue.
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