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

Taiwan • Business • 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.

Key Updates

04/11 12:39

Trump's 90-day tariff postponement did not stabilize the markets: the Asian stocks decline, the gold prices reach a new high, the yen soars to a two-year high

On April 9, President Donald Trump announced a 90-day suspension of higher tariffs on 75 countries, excluding China, in an effort to ease trade tensions, but this move failed to boost market confidence. Asian stock markets briefly rebounded but then fell back, with the Nikkei 225 index plunging 5.4%. The safe-haven sentiment drove gold prices to a record high, and the yen reached a two-year high against the dollar. Concerns about the escalating U.S.-China trade war persist, leading to funds flowing into safe-haven assets.

04/11 11:10

The United States' imposition of a 25% tariff on imported cars has shaken the global automotive industry, leading governments and companies around the world to respond actively.

On April 3, 2025, President Trump of the United States imposed a 25% tariff on all imported cars and components, causing a global upheaval in the automotive industry. The American automotive industry strongly opposed this decision, citing concerns over supply chain disruptions and increased costs. South Korea initiated an 11 trillion won support plan to stabilize its exports, Swiss companies pursued diplomatic efforts to lessen the impact, and Taiwan was placed on the U.S. list for postponed reciprocal tariff negotiations, beginning talks. This policy is reshaping the global automotive trade landscape.

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.

Trump's Tariff Policy Fully Implemented, Triggers Global Chain Reaction

On April 9, U.S. President Trump officially launched a policy imposing a 104% tariff on Chinese goods, while simultaneously increasing import taxes on goods from multiple countries at varying rates. Trump posted on his social platform "Truth Social," stating: "Now is a great time to move your company to the U.S.," and promised that companies relocating back to the U.S. would enjoy "zero tariffs" and "no environmental review delays." He emphasized: "Don't wait, act now!"

China immediately announced that starting April 10, it would impose an 84% tariff on all U.S. imports as a retaliatory measure. The European Union, on April 9, voted to pass the first round of countermeasures, imposing up to a 25% tariff on U.S. products such as soybeans, steel, aluminum, and motorcycles, affecting approximately $23.2 billion worth of goods. European Commission President Ursula von der Leyen also spoke with Chinese Premier Li Qiang, urging to avoid an escalation of the trade war and emphasizing that China and Europe should jointly maintain a free and fair trade system.

U.S. Stock Market Experiences Volatility, S&P 500 Falls Below 5,000 Points

Trump's tariff policy has triggered a strong market reaction. The S&P 500 index has dropped 12.1% since the policy's announcement, falling below the 5,000-point mark. The Dow Jones Industrial Average fell over 200 points in early trading, while the Nasdaq index was relatively resilient due to a rebound in tech stocks. According to Vanda Research data, U.S. retail investors still net bought about $5.1 billion in stocks last Thursday and Friday, indicating that some investors are opting to buy on the dip.

Despite Trump's call for "calm" on social media, stating "now is a good time to buy," market sentiment remains tense. Coldstream Wealth strategists noted that young investors are showing relative rationality, but those nearing retirement age appear anxious, with some inquiring whether they should switch to an all-cash position.

Bond Market Turmoil Intensifies, Deutsche Bank Warns Fed May Initiate Emergency QE

Alongside the stock market, the U.S. bond market is also experiencing turmoil. The yield on the 30-year U.S. Treasury bond briefly rose to 5.02%, the highest since November 2022. George Saravelos, Deutsche Bank's global head of FX strategy, pointed out that if bond market volatility continues, the Federal Reserve may be forced to initiate emergency quantitative easing (QE) to stabilize the market. He stated: "The market has lost confidence in U.S. assets, and instead of hoarding dollar liquidity, investors are choosing to sell off U.S. assets directly."

Additionally, the dollar weakened against most major currencies, indicating an accelerated trend of "de-dollarization." Deutsche Bank believes that the dollar's status as a safe-haven asset is facing a confidence crisis.

Krugman Warns: Tariff Policy May Trigger Financial Crisis

Nobel laureate economist Paul Krugman has harshly criticized Trump's tariff policy. He pointed out that these policies lack clear objectives, making it difficult for businesses to plan long-term investments, thereby impacting economic growth. Krugman stated: "Trump's policies are driven by self-interest rather than ideology, making the future unpredictable."

He further noted that market expectations for inflation have instead declined, reflecting that investors are massively selling off assets for cash, leading to a "dash for cash" trend. This phenomenon is similar to market behavior during the 2008 financial crisis and the early stages of the 2020 COVID-19 pandemic, indicating that potential financial crisis risks are accumulating.

Global Supply Chain and Industry Structure Facing Restructuring

Trump's tariff policy has also impacted the global supply chain. Apple has sped up its shift of production capacity out of China, with iPhone exports from India expected to exceed $17 billion by 2024. Many multinational companies are beginning to reassess their production and supply strategies to cope with the uncertain trade environment.

Deutsche Bank and several economists have pointed out that this widespread imposition of tariffs will disrupt the global supply chain system established over the past few decades, having long-term effects on industries such as pharmaceuticals, technology, and manufacturing.

Investors Respond Differently, Market Remains Highly Volatile

Faced with market volatility, high-net-worth investors are adopting different strategies. According to JPMorgan Private Bank data, some are choosing to buy on dips, while other investors are turning conservative, increasing cash positions and seeking asset diversification. CFRA recommends increasing cash holdings to 10% to quickly seize opportunities when they arise in the market.

Despite the intense market fluctuations, some investors are still choosing to stick to long-term investment plans. Experts generally advise against making extreme decisions based on short-term emotions and advise sticking to the fundamental principles of asset allocation and risk management.

References

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