The trade dispute between the United States and China has intensified, with both nations imposing increased tariffs on each other’s goods, leading to market volatility. China has escalated the situation by raising tariffs on US products to 125%. This move follows President Xi Jinping’s statement that there are “no winners in a tariff war.”
US stock markets experienced a mixed reaction to these developments. On Friday, US indices edged higher, with the S&P 500 rising 0.2%, and the Nasdaq Composite gaining 0.4%. The Dow Jones Industrial Average remained relatively flat. This slight recovery occurred as traders assessed the impact of the newly imposed tariffs, concluding a week marked by significant market fluctuations. The week’s volatility included a sharp sell-off on Thursday, driven by uncertainty surrounding trade policies, which partially offset a substantial rally on Wednesday. That Wednesday rally was triggered by President Trump’s announcement of a 90-day pause on some of his “reciprocal” tariffs.
Earlier in the week, US stocks had plummeted on Thursday, with the S&P 500 falling by 2.1% and the Nasdaq Composite declining by 2.7%. This downturn was attributed to investor concerns about the impact of the escalating US-China tariffs, particularly on the technology sector. The trade tensions escalated after President Trump increased duties on Chinese imports to 125%. In response, Beijing retaliated by imposing 84% tariffs on US goods, effective from Thursday. These actions represent a substantial escalation in the ongoing trade war, with President Trump having raised tariffs on Chinese goods by a total of 145% since taking office. The deepening trade conflict had resulted in a 4% drop in US stocks during early afternoon trading on Thursday.
In contrast to the turmoil in Western and Asian markets, Indian stock markets showed resilience. On Friday, India’s Sensex and Nifty indices surged in early trading. This surge followed the US administration’s decision to implement a 90-day pause on tariff increases for India and several other countries. The 30-share BSE Sensex rose by 1,210.68 points to reach 75,057.83 in early trade, while the NSE Nifty climbed 388.35 points to 22,787.50.
The situation remains fluid, with potential ramifications for global trade and economic stability.
