US-China Trade War Escalates: Trump Announces 104% Tariff Increase, China Responds, European Economic Forecast Revised Downward, Swiss Watch Exports Affected

Taiwan • Business • 04/09 14:11
US-China Trade War Escalates: Trump Announces 104% Tariff Increase, China Responds, European Economic Forecast Revised Downward, Swiss Watch Exports Affected

On April 9, 2025, U.S. President Donald Trump announced a 104% tariff on all Chinese imports, and China retaliated by increasing tariffs on U.S. goods to 84%. This action impacted the global economy, as Italy and Spain consider lowering their economic growth forecasts, and Swiss watch exports suffering. Italian Prime Minister Giorgia Meloni plans to visit the U.S. on April 17 to meet with Trump to seek ways to ease trade tensions. The U.S. has already initiated trade negotiations with multiple countries to try to resolve the trade conflict.

Key Updates

04/09 18:08

The United States' 46% tariff on Vietnam has taken effect, putting pressure on Taiwanese businesses and the garment industry, prompting the Vietnamese government to launch diplomatic efforts.

On April 9, 2025, the United States implemented a 46% tariff on Vietnamese goods, affecting Vietnam's export economy, particularly impacting industries like garments, furniture, and toys. Taiwanese businesses with factories in Vietnam, such as Eclat and Makalot, are under pressure due to reduced orders. Vietnam's Deputy Prime Minister, Ho Duc Phuc, traveled to the U.S. to negotiate, expressing a willingness to reduce tariffs on U.S. goods to zero. A Reuters/Ipsos poll shows that 57% of Americans oppose this policy, fearing it will increase consumer goods prices.

04/09 17:07

Trump urges investment as a "buying opportunity," prompting a 246-point rebound in the Dow, as the China-Europe tariff escalation leads to a 23% drop in Apple's stock price.

On April 9, President Trump of the United States urged investors to "stay calm" via social media, saying "now is a great time to buy," which helped boost the Dow Jones Industrial Average by 246 points at closing. As China and the EU imposed retaliatory tariffs on U.S. goods, global markets experienced turbulence, and Apple's stock price dropped 23% over four days, erasing more than $770 billion in market value. Trump reiterated his wish for Apple to relocate its iPhone production line back to the U.S., but analysts cautioned that this could raise costs to $3,500 per unit, putting pressure on both consumers and inflation.

04/09 16:40

US-China Trade War Escalates: US Imposes a 104% Tariff on Chinese Goods, Taiwan's Electronics Industry Confronts Supply Chain Challenges

On April 9, 2025, the United States imposed a 104% tariff on goods from China, leading to a disruption in the global laptop supply chain. Brands like ASUS, Acer, Lenovo, HP, and Dell paused shipments to the U.S. for two weeks. Taiwan, being a key supply base, is facing tariff pressures from both the U.S. and China, prompting electronics companies to adjust their supply chain and market strategies accordingly. Taiwanese companies are considering shifting production capacity to India or Mexico to avoid the impact of high tariffs.

04/09 15:11

Trump's new tariff policies have triggered global market turmoil: U.S. stocks plunge a 12%, bond market experiences volatility, retaliatory tariffs are escalating.

On April 9, 2025, President Trump of the United States imposed a 104% tariff on Chinese goods and extended it to multiple countries, which sparked global trade tensions. China and the European Union quickly retaliated, leading to a sharp decline in the U.S. stock market, with the S&P 500 index dropping 12.1%. The U.S. bond market experienced turmoil, and Deutsche Bank warned that the Federal Reserve might need to initiate emergency quantitative easing. The Nobel Prize-winning economist Paul Krugman warned that this policy could trigger a financial crisis. Trump called on investors to stay calm, saying it's a good time to buy.

04/09 14:43

The Trump administration imposed a 32% tariff on goods from Taiwan, devastating the export industry.

On April 9, 2025, the Trump Administration imposed a 32% tariff on Taiwanese goods, severely affecting Taiwan's export economy, particularly the traditional manufacturing and information and communication technology (ICT) industries. Pre-orders for the Nintendo Switch 2 were delayed due to U.S. tariff policies, with sales estimates revised down to 15 million units from previous projections, priced at $449.99 and scheduled for release on June 5. This event highlights the disruptions in the global supply chain.

04/09 14:11

US-China Trade War Escalates: Trump Announces 104% Tariff Increase, China Responds, European Economic Forecast Revised Downward, Swiss Watch Exports Affected

On April 9, 2025, U.S. President Donald Trump announced a 104% tariff on all Chinese imports, and China retaliated by increasing tariffs on U.S. goods to 84%. This action impacted the global economy, as Italy and Spain consider lowering their economic growth forecasts, and Swiss watch exports suffering. Italian Prime Minister Giorgia Meloni plans to visit the U.S. on April 17 to meet with Trump to seek ways to ease trade tensions. The U.S. has already initiated trade negotiations with multiple countries to try to resolve the trade conflict.

04/09 13:13

Trump's announcement of a tariff policy has caused market turbulence, but individual investors are still holding firm in the market.

On April 2, President Trump of the United States announced the imposition of "reciprocal tariffs" on multiple countries worldwide, which caused turmoil in the financial markets, leading to the S&P 500 index dropping by more than 12%. Despite this, many wealth management firms noted that most individual investors stayed in the market, and no large-scale sell-off was observed, particularly noting that young investors seized the opportunity to increase their investments. Advisors suggest increasing cash allocations to manage uncertainty and to avoid emotional trading.

04/09 11:38

Impact of US Tariff Policy on the Display Industry: Increased Pressure to Restructure Asian Supply Chains, Rising AMOLED Materials Costs

On April 9, 2025, the United States implemented a reciprocal tariffs policy, impacting the global supply chain and hitting the display industry. A TrendForce report indicates that optical films and AMOLED materials for displays are being taxed, putting pressure on the Asian supply chain to restructure. China imposed a 34% tariff on U.S. goods, impacting U.S. suppliers' exports to China. The end market might see a drop in demand for TVs and laptops due to increased costs and falling consumer confidence.

04/09 10:42

Due to tariffs, iPhone prices in the U.S. may increase by 12% to 43%, leading to a consumer buying spree.

On April 9, 2025, President Trump of the United States imposed a 104% tariff on Chinese imports, creating cost pressures for Apple Inc. If Apple decides to pass these costs onto consumers, iPhone prices could increase by 12% to 43%, with some high-end models seeing an increase of up to $350. This policy has sparked a buying frenzy among American consumers, resulting in a surge of crowds at Apple stores. Apple has yet to announce any price adjustments, but it may absorb some costs and pressure suppliers to reduce prices to maintain its profit margins. If the tariffs continue, price adjustments might become unavoidable.

04/09 10:11

In the year 2025, the escalation of the trade war between the US and China caused market turmoil: US Treasury bonds plummeted, bond yields soared, and the stock market and the dollar both fell.

On April 9, 2025, the trade war between the US and China escalated as the United States imposed a 104% tariff on goods from China, and China responded with an 84% retaliatory tariff, leading to turmoil in global financial markets. The US Treasury market experienced a sell-off, with the 10-year Treasury yield breaking past 4.5% and the 30-year surpassing 5%, marking the largest three-day rise since 1982. US stocks and the dollar both declined, and hedge funds unwinding high-leverage basis trades triggered a bond market crash, spreading panic to global bond markets and safe-haven assets. The demand for US Treasuries weakened, and market confidence took a hit.

US Imposes 104% Tariff on Chinese Goods, China Retaliates with 84%

President Trump of the United States officially launched a new round of tariff measures in the early hours of April 9, imposing a total tariff of 104% on all Chinese imports. This rate consists of three parts: a 34% reciprocal tariff, a 20% punitive tariff (targeting the fentanyl issue), and an additional 50% comprehensive tariff. White House Press Secretary Karoline Leavitt stated that these measures aim to force China back to the negotiating table.

China, on the other hand, will increase the tariff rate on US goods from 34% to 84% starting at 12:01 PM Beijing time on April 10. The Chinese Ministry of Commerce emphasized that this is a response to the US's "compounding mistakes" and stated they are "prepared to see this through to the end." Additionally, China has listed 11 US companies as "unreliable entities" and imposed export controls on 16 US companies, restricting the export of medium and heavy rare earths.

Tariff Impact on Global Supply Chain and Industries

The tariff war quickly affected the global supply chain. The Swiss watch industry was the first to feel the impact, with the US imposing a 31% import tariff on Swiss goods, much higher than the EU's 20%. Swiss watch brands like Rolex, Breitling, and Audemars Piguet have suspended shipments to the US. Erik Boneta, founder of luxury watch distributor Boneta Inc., noted, "All major brands have suspended shipments, waiting to see how the tariffs will impact the market."

The Swiss Watch Industry Federation stated that Swiss watch exports have already declined by 3% in 2024 and will slow again in February 2025. Although rising gold prices have boosted demand for second-hand gold watches, with models like the Rolex Day-Date 228238 seeing price surges, overall exports still face pressure.

Toys and electronics are also affected. US toy company Basic Fun has suspended all shipments from China, and Nintendo announced a delay in the shipment plan for Switch 2 due to the US imposing a 24% tariff on Japanese goods.

European Economic Forecasts Revised Downward, Italy and Spain Hit

The US's 20% tariff on EU goods took effect on April 9. Italian government sources revealed that the country is preparing to revise its 2025 economic growth forecast from 1.2% down to 0.6%, and the 2026 forecast down to 0.8%. Italian Prime Minister Giorgia Meloni stated that up to 25 billion euros of EU funds will be used to cushion the impact and criticized the US's protectionist policies as "harmful to both sides."

In Spain, Central Bank Governor Luis Escriva stated that the turmoil caused by tariffs will force the country to revise its 2025 economic growth forecast, currently at 2.7%. The Spanish Ministry of Economy pointed out that about 80% of exports to the US will be affected, covering major export items such as olive oil and wine.

Italian Prime Minister to Visit US for Talks with Trump

Facing export pressure, Italian Prime Minister Meloni announced she will visit Washington on April 17 for talks with President Trump. She supports the EU's "zero-for-zero" (tariff-free trade) proposal and hopes to negotiate tariff exemptions for Italian export goods. Italy is the third-largest economy in the Eurozone, with exports to the US accounting for 10% of total exports in 2024 and a trade surplus of 38.9 billion euros with the US.

According to Politico, Meloni will become the first European leader to meet with Trump. She is seen as a potential bridge between Europe and Washington and hopes to secure more favorable conditions for Italian businesses in the negotiations.

US Engages in Trade Talks with Multiple Countries

The Trump administration stated that it has begun trade negotiations with over 70 countries. White House economic advisor Hassett noted that priority is given to negotiations with allies such as Japan and South Korea. Vietnam's Deputy Prime Minister has visited the US for talks this week, and Israel has already met with Trump. At a Republican National Committee dinner, Trump stated, "These countries are now calling us, eagerly trying to gain my favor."

US Treasury Secretary Scott Bessent warned China not to counter tariffs by devaluing the yuan and emphasized that China is "the most significant violator in the international trade system."

References

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