Author: The New York Times
Published on: 07/04/2025 | 00:00:00
AI Summary:
Stocks around the world plunged on Monday, and the S&P 500 was poised to drop again. President Trump doubled down on global tariffs that have made investors increasingly pessimistic about the economy. In Taiwan, a hub for global technology, stocks were clobbered nearly 10 percent. Since Mr. Trump announced his global tariffs last week, the price of Bitcoin has plunged 10 percent, dropping below $78,000 on Sunday night. The decline shows that Bitcoin, often pitched as a stable long-term source of value, is still subject to the gyrations of the broader market. China’s leaders said on Sunday that they were prepared for a trade war with the United States. Shares in Germany’s Rheinmetall are down 9 percent, but dropped as much as 27 percent this morning. That shares were at a record high less than three weeks ago. But in the big market downturn induced by President Trump’s tariffs, no Fed rescue is in sight. For days, the market momentum has been almost entirely downward. Advertisement April 7, 2025, 3:57 a.m. ET52 minutes ago Reporting from New Delhi Stocks in India fell more than 4 percent. Many Indian businesses were thinking the changes might give them an advantage against Asian competitors like Vietnam and Bangladesh. But the global selloff seems to have scared everyone. The $5 trillion that Wall Street has shed is worth more than all Indian stocks combined. ET2 hours ago Reporting from Seoul The mayhem in Hong Kong stocks was in part a delayed reaction since the market was closed on Friday for a holiday. It was also the first chance investors had to digest China’s retaliatory move late on Friday. For now, many investors are heading to seemingly safer investments such as the Japanese yen and the Swiss franc. China's leaders have sent a clear message about the effects of the Trump administration’s sweeping tariffs: Things will be painful, but it is nothing that the country cannot handle. A commentary on Sunday in the Communist Party mouthpiece, the People’s Daily, said Beijing had prepared for a trade war with the United States. China also sought to project solidarity with other nations targeted by U.S. Tariffs. China’s projection of relative strength belies the grave harm the Trump administration’s tariffs could potentially inflict on China. Exports remain the strongest engine for growth at a time when China is trying to dig itself out of a property crisis and tackle other major economic problems. The People’s Daily commentary argued that China was prepared to weather Mr. Trump’s tarifs because it was no longer as reliant on the U.S. Market for its exports. "We must turn pressure into motivation," a researcher at the Chinese Academy of Social Sciences wrote on social media. "The correct countermeasure is to implement unilateral zero tariffs on imports from all countries," he wrote. Mr. He posted the comment on his personal WeChat Moments, which are visible only to his friends. U.S. Oil prices fell sharply, briefly dipping below $60 a barrel on Sunday. Crude oil now costs around 15 percent less than it did last Wednesday. That prices have fallen so quickly reflects deepening concern that tariffs could slow economic growth. Since Mr. Trump announced his global tariffs last week, the price of Bitcoin has plunged 10 percent, dropping below $78,000 on Sunday night. The rapid drop shows that Bitcoin, often pitched as a stable long-term source of value, is still subject to the gyrations of the broader market that has cratered since he announced broad import taxes last week. In Asia, trading was extremely volatile throughout the day. Stocks in mainland China were down about 8 percent. In Japan, declines were so sharp that the country’s exchange operator briefly halted trading in Japanese stock futures on Monday morning. Analysts and investors in Asia are unable to discern a bottom to the market slides. Taiwan Semiconductor Manufacturing Company, the world’s largest chip manufacturer, was down nearly 10 percent, while Apple’s main contract manufacturer, Foxconn, also plunged 10 percent. In Hong Kong, the Chinese technology giants Alibaba, Tencent and Xiaomi all tumbled. The historically high tariffs that Mr. Trump announced on Wednesday caught investors, economists and businesspeople off guard. Chief executives have begun warning consumers that they should expect prices to increase on some groceries, clothes and other products. Some auto companies have already announced production pauses overseas, as well as job losses domestically. Stocks in Asia and Europe Fall Sharply as Trump Doubles Down on Global Tariffs: Live Updates - The New York Times On Wednesday, President Trump has issued a flurry of tariffs in an effort to rewire the global economy. A 10 percent base line rate for the world went into effect on Saturday, with much higher ones for dozens of counties coming next week. Some investors remain cautiously optimistic that the solid economy from the start of this year will withstand the onslaught of high tariffs Economists found that when Mr. Trump put tariffs on China in his first term, most of that cost was passed on to consumers. The president and his advisers say their goal is to make the tariffs so painful that they force companies to make their products in the United States. They argue that this will create more American jobs and push up wages. Trump has long described bilateral trade deficits as examples of America being “ripped off” or “subsidizing” other countries. This formula doesn’t account for the fact that some countries are better at making certain products, a concept known as comparative advantage. Economists say it is nonsensical to force countries to exactly equalize their exports and imports to and from the United States. Canada has vowed to defend its workers, businesses and economy from new tariffs and threats from Mr. Trump. Canada said it would impose new retaliatory tariffs on $20 billion worth of U.S. Imports. Mexico sent more than two dozen accused cartel leaders to the United States to face criminal charges. Treasury Secretary Scott Bessent said Moscow was spared because sanctions imposed on Russia effectively halted U.S.-Russian trade. Last year, Russia exported about $3 billion worth of goods to the United States. North Korea, Cuba and Belarus were also excluded from the new levies. The Yale Budget Lab estimated that Mr. Trump’s new auto tariffs would raise vehicle prices 13.5 percent on average, the equivalent of an additional $6,400 for the price of an average new 2024 car. In total, American households would pay $500 to $600 more as a result of the tariffs. Nearly half of all vehicles sold in the United States are imported, as well as nearly 60 percent of the parts used in vehicles assembled in the united States. Since the North American free trade zone was created in 1994, American and foreign-owned automakers have built supply chains. For example, the 2024 Chevrolet Blazer, a popular sport utility vehicle made by General Motors, is assembled at a plant in Mexico using engines and transmissions. A 9.1 percent drop in the S&P 500 is the steepest weekly decline since March 2020. China is the third-biggest buyer of U.S. Agricultural products. But for Lesotho, the impact of a 50 percent tariff is enormous.
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