A day after imposing a sweeping 104% tariff on all Chinese goods, effective from midnight on Tuesday, US President Donald Trump on Wednesday hiked the tariff yet again to 125% on all Chinese goods. Taking to social media, Trump said that based on the lack of respect that China has shown to the world’s markets, he raised the Tariff charged to China by the United States of America to 125%, effective immediately. In a retaliatory move, China earlier in the day announced it will increase its tariff on US goods from 34 percent to 84 percent starting April 10.
For India, 27 % tariff announced by the US President Donald Trump is all set to come into effect from Wednesday, and the Indian Commerce and Industry Minister Piyush Goyal, scheduling a meeting with Indian exporters on April 9, a report by the Global Trade Research Initiative (GTRI) says India may benefit because of relatively higher tariff for other Asian countries.
Indian shares continued to fall sharply on Monday, with the Sensex and Nifty crashing about 5 per cent in early trade, mirroring a sharp fall in global equities. Sensex, a pack of India’s top 30 companies listed on the Bombay Stock Exchange, lost 3,939.68 points or 5.22 per cent to 71,425.01, while Nifty, the National Stock Exchange index, dropped 1,160.8 points or 5.06 per cent to 21,743.65. The collapse reportedly wiped out investors’ wealth worth Rs 20.16 lakh crore in early trade. Last week, the Sensex sank 2,050.23 points or 2.64 per cent, while the Nifty dropped 614.8 points or 2.61 per cent.
Other Asian markets also slumped, with Hong Kong’s Hang Seng dropping nearly 11 per cent, Tokyo’s Nikkei 225 plunging nearly 7 per cent, Shanghai SSE Composite index tumbling over 6 per cent, and South Korea’s Kospi index declining 5 per cent.
The soaring price of gold, which has reached record highs in recent months, has been a boon for investors but a burden for consumers purchasing jewelry. However, market analysts suggest a significant downturn could be on the horizon, potentially offering relief to buyers. Some forecasts predict a dramatic 38% drop in gold prices, a shift that could reshape investment strategies worldwide.
On Monday, the price of 24-carat gold was recorded at Rs 89,510 per 10 grams. If the anticipated decline materialises, prices could plummet to around Rs 55,496 per 10 grams, marking a substantial decrease.
Gold’s recent surge was driven by a mix of geopolitical uncertainty, economic instability, and inflation concerns. Investors flocked to gold as a safe haven, fearing fluctuations in the US economy and global markets. The ongoing trade tensions initiated during former US President Donald Trump’s administration exacerbated these concerns, further boosting demand for gold..
President Trump has sparked a market meltdown after he unveiled sweeping tariffs against US trading partners last week. China also hit back, saying it would impose retaliatory levies of 34 percent on all US goods from April 10. The tit-for-tat moves have now raised concerns of a prolonged trade war.
“Reciprocal tariffs, even if temporary, highlight the increased uncertainty for companies and investors,” Reuters quoted Kotak Institutional Equities analyst Sanjeev Prasad as saying.
“The performance of Indian markets in the next few weeks will depend on whether there is a reconciliation or retaliation in the tariff situation and behaviour of India’s retail and domestic institutional investors,” he said.
Undeterred by a stock market collapse that has continued for days, President Donald Trump threatened additional tariffs on China on Monday, raising fresh concerns that his drive to rebalance the global economy could intensify a financially destructive trade war.
Trump’s threat, which he delivered on social media, came after China said it would retaliate against U.S. tariffs he announced last week. “If China does not withdraw its 34% increase above their already long term trading abuses by tomorrow, April 8th, 2025, the United States will impose ADDITIONAL Tariffs on China of 50%, effective April 9th,” he wrote on Truth Social. “Additionally, all talks with China concerning their requested meetings with us will be terminated!”
If Trump implements his plans, U.S. tariffs on imports from China would reach a combined 104%. The new taxes would be on top of the 20% tariffs announced as punishment for fentanyl trafficking and his separate 34% tariffs announced last week. Not only could that increase prices for American consumers, it could give China an incentive to flood other countries with cheaper goods and seek deeper partnerships with other trading partners.
As of midday on Monday, the Dow Jones Industrial Average had fallen 750 points, or 2%. The S&P 500 had slumped 1.5%, and the Nasdaq composite was off 1.2%. The drop in the markets briefly reversed in the morning after a false report that Trump was considering a pause in his tariff plans. The frantic trading, which sent stocks spiking before plummeting again, showed how investors are operating on a hair trigger and are eager for any sign of encouraging news.
The White House account said it was “fake news” that Trump was considering a pause. The Republican president has remained defiant despite fears that he could be pushing the U.S. toward a recession, insisting that his tariffs are necessary for rebuilding domestic manufacturing and resetting trade relationships with other countries.
