Global markets tumble as China retaliates with 84% tariffs
Chinese authorities have responded to American tariffs by deciding to raise tariffs on imports from the USA from 34% to 84%. In response, sell-offs intensified on European trading floors, as investors are likely worried about the escalation of the trade conflict between the world's largest economies.
On Wednesday afternoon, a second wave of sell-offs swept across Europe. In the afternoon, China retaliated against the United States by imposing its own tariffs at a rate of 84%. This information did not improve investor sentiment.
The German DAX experienced even deeper losses, dropping 4.04% to 19,436.68 points. The index of Germany's leading companies was under intense selling pressure. Companies in the aviation and automotive sectors performed the worst – Mtu Aero Engines fell by 6.49%, and real estate giant Vonovia lost 6.01%. Fresenius SE (-5.95%) and semiconductor manufacturer Infineon (-5.90%) also saw significant declines. These major losses reflect investors' concern about the growing threat to German exports amidst escalating trade tensions.
The French market also in deep red
The Paris CAC40 fell by 4.18% to 6,803.90 points. Pharmaceutical and aviation companies suffered the largest losses – Sanofi fell by 7.18%, and Safran declined by 7.14%. Unibal-Rodamco, a major European commercial real estate company, lost 6.64%, while Airbus declined by 5.86%. The luxury conglomerate Kering, owner of brands such as Gucci and Balenciaga, dropped by 5.17%.
The Spanish IBEX 35 ended the session with a 3.52% decline to 11,642.39 points. Pharmaceutical company Grifols recorded the deepest losses, with its shares dropping by 7.65%. Significant losses were also experienced by Fluidra (-7.03%) and telecommunications operator Cellnex Telecom (-6.39%). The travel company IAG, owner of British Airways and Iberia, lost 5.30% of its value.
It is noteworthy that the investors reacted to the United States' unprecedented decision to impose 104% tariffs on China. This move sparked a reaction from investors, initially in Asia, then in Germany, and France.
Chinese retaliation deepens global unrest
Today's sell-off on European exchanges is a direct reaction to China's response to the tariff policy of U.S. President Donald Trump. The Chinese State Council's Tariff Commission Office announced that from April 10, tariffs on American goods would increase to 84%. This is in response to the United States' imposition of 104% tariffs on Chinese products.
"The U.S. threat to escalate tariffs against China is adding insult to injury, further exposing the U.S. nature of extortion," said the Chinese Ministry of Finance in an official statement.
The current situation is yet another chapter in the escalating trade conflict. It is important to recall that President Trump announced "retaliatory tariffs" on the entire world last week: 10% on all imports and 25% on foreign cars. Additionally, special rates were introduced for countries with a large trade deficit with the US. For the European Union, it's 20%.
