Trump's signing of the executive order on reciprocal tariffs sparks global market turmoil: U.S. stocks plummet, Nikkei tumbles, and Korean stocks experience slight fluctuations.

On April 8, 2025, President Trump of the United States signed an executive order imposing steep tariffs on China and other trade partners, leading to upheaval in global financial markets. The three major U.S. stock indices reversed from gains to losses, with the Dow Jones Industrial Average swinging over 2,300 points during the session and ending the day down more than 300 points. The Nikkei 225 Index plunged over 1,100 points at the open, a drop of more than 3%, while the South Korean stock market edged up by 0.11%. Fears of an escalating U.S.-China trade war grew, and experts warned that the global trade order is under threat.

Trump Signs Executive Order: Reciprocal Tariffs Officially Enacted

The White House issued an executive order on April 8, Eastern Daylight Time, with President Trump officially launching the reciprocal tariff policy. According to the executive order, starting from 12:01 AM on April 9, the U.S. will impose a combined tariff rate of 104% on all imported goods from mainland China and Hong Kong, and will end the tax exemption for packages valued under $800. The new tax rate includes a 30% ad valorem tax or a flat tax of $25 per item, which will further increase to $50 per item on June 1, 2025.

White House Press Secretary Karoline Leavitt stated, "President Trump has a spine of steel, and he will not yield. The U.S. does not need foreign countries as much as they need us." She emphasized that this policy is to protect American industries and jobs and to encourage fair negotiations with trade partners.

China Responds Strongly: Trade War Escalates

Chinese Foreign Ministry spokesperson Lin Jian responded at a press conference in Beijing, saying, "There are no winners in a trade or tariff war, and protectionism has no way out. China will take necessary measures to firmly safeguard its legitimate rights and interests." The Chinese State Council Tariff Commission also announced that starting April 10, an additional 34% retaliatory tariff will be imposed on all U.S. imports.

Trump responded at a White House energy event, "We're waiting for their call. It'll come!" He expressed hope for reaching an agreement with China but emphasized that if China does not withdraw the retaliatory tariffs, the U.S. will impose an additional 50% punitive tariff, bringing the total rate to 104%.

U.S. Stock Market Volatility: Tech Stocks Take a Hard Hit

Trump's tariff policy caused significant fluctuations in the U.S. stock market. On April 8, the Dow Jones Industrial Average initially rose by 1,461 points, then sharply reversed, ultimately closing down over 300 points, a decline of 0.8%; the S&P 500 fell by 1.6%; and the Nasdaq dropped by more than 2%.

Tech stocks took a hard hit. Apple's (AAPL) stock price went from an early rise of nearly 5% to a drop of over 5%, with a four-day cumulative decline of 23%, reducing its market value to $2.59 trillion, below Microsoft's (MSFT) $2.64 trillion. The semiconductor sector was also sold off, with the VanEck Semiconductor ETF down 2.7%, and individual stocks like AMD, Intel, and Micron falling between 4% and 10%.

Nikkei Index Plummets Over 1,000 Points, Korean Stocks Slightly Up

Asian markets were also affected. The Tokyo Stock Exchange's Nikkei 225 index opened on April 9 with a drop of 1,144.11 points, a decline of 3.47%, closing at 31,868.47 points, marking the largest one-day drop in nearly a year. The TOPIX index also fell by 2.93%, closing at 2,360.86 points.

The South Korean stock market remained relatively stable. The Seoul Composite Index opened at 2,330 points, slightly up by 2 points, a rise of 0.11%. However, the South Korean government has announced emergency support measures for the automotive industry, including reducing car purchase taxes, increasing electric vehicle subsidies, and expanding financial policies to cope with the impact of the U.S. imposing a 25% tariff on imported cars.

Official and Market Responses: Policy and Sentiment Intertwined

Federal Reserve Chairman Jerome Powell stated that the impact of tariff hikes might exceed market expectations, and the Fed will closely monitor developments before making policy adjustments. Chicago Fed President Austan Goolsbee pointed out that tariffs are a negative supply shock and could have uncertain effects on inflation and consumer spending.

Trump emphasized on social media that the U.S. earns $2 billion daily from tariffs and stated, "America will soon be very wealthy again." He revealed that Japan and South Korea have sent delegations to the U.S. for consultations, seeking to avoid being included in the high-tariff list.

Trump's signing of the executive order on reciprocal tariffs sparks global market turmoil: U.S. stocks plummet, Nikkei tumbles, and Korean stocks experience slight fluctuations.

Key Updates

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