U.S. markets fell on Thursday, wiping out most of the historic gains made the previous day on President Donald Trump’s brief delay in imposing new tariffs. Although the 90-day moratorium brought relief to the majority of nations, ongoing trade tensions with China remained a heavy burden on investor moods.
The S&P 500 fell 5.8%, and the Dow Jones Industrial Average fell 1,746 points. The Nasdaq composite also fell 5.8% at midday. Wall Street was still on high alert, seeing the trade war as an ongoing threat to the world economy even with the temporary relief.
Tariffs on China Explained, Creating New Jitters
Investor hope diminished further when the White House made clear that imports from China would be subject to tariffs worth 145%, not the previously mentioned 125% tariff. The additional 20% comprises penalties associated with fentanyl-linked imports, reports the Associated Press.
Not even a favorable inflation report was able to give the markets a boost. Analysts explained that the reading was based on previous circumstances and may not account for the impending economic burden imposed by tariffs.
Trump Spares Majority of Countries
On Wednesday, April 9, Trump had declared a temporary tariff pause for the majority of countries, with the 90-day grace period excluding only China and its territories, Hong Kong and Macau.
China, in return, put 84% tariffs on U.S. products. Though Beijing declared itself willing to negotiate, it also let it be known that it would not sit idly while the dispute grew. The Chinese government further declared curbs on Hollywood film imports as one of the steps in its retaliation, although experts say the step can have limited consequences for the U.S. economy.
