China’s retaliation with tariffs against the US escalated tension in the global economy. Sales accelerated in stock markets, resulting in $6 trillion being wiped out from Wall Street in just two days. The European Union also took action to prevent cheap goods from Asia. Experts highlighted the significant danger to the world of both countries choking each other.

US President Donald Trump’s tariff hikes have shocked global trade. China promptly retaliated against US tariffs exceeding expectations. Trump imposed higher taxes on countries where the US has a significant trade deficit. This included a 20% extra tax on the European Union, 34% on China, and 46% on Vietnam, three of the US’s main trading partners.

It was mentioned that the high taxes imposed on Vietnam also targeted Chinese companies. Chinese companies were redirecting their products to the US via countries like Vietnam.

China announced that it would apply tariffs at the same 34% rate on the US. Additionally, China activated sanctions against the US’s rare earth exports and directed them towards specific American companies.

BEIJING DEALS CRITICAL BLOW TO TRUMP American companies selling in the Chinese market suffered a severe blow due to tariff actions. Experts noted that China’s additional tariffs struck directly at the heart of the US president. They also indicated that China did not appear worried about meeting food and other needs from different markets. Despite this, experts underlined the dangerous situation for the world if the two largest economies continue to strangle each other. In February, Beijing had imposed a 15% tax on US coal and natural gas, and a 10% tax on agricultural machinery. Moreover, by March 18, China began applying a 10-15% tariff on $21 billion worth of American products, including pork, chicken, soybeans, and other agricultural goods, in retaliation against US tariffs.

EARTHQUAKE IN US STOCK MARKET China’s retaliatory tariffs accelerated sales in the already weakening US stock market. The Dow Jones index lost over 2,200 points at closing, decreasing by 5.5% to 38,314.86 points. The S&P 500 fell by 5.97%, to 5,074.08 points, and the Nasdaq dropped 5.82% to 15,587.79 points. The weekly declines for the indexes were 7.9% for Dow Jones, 9.1% for S&P 500, and 10% for Nasdaq. The rapid drop in the indexes over two days caused losses exceeding $6 trillion, erasing $10 trillion from US markets since Trump took office.

CHINA PREPARATION IN EUROPE On the other hand, as obstacles increase for Chinese manufacturers entering the US market, it was indicated that the European Union (EU) might face an unexpected wave of imports. It was reported that the EU is preparing measures to prevent cheap goods from Asia flowing into European markets. European officials were said to be working on tightening import controls due to tariffs imposed on China and Vietnam.

According to a report in the Financial Times, an EU diplomat stated that the EU applied up to a 35% tariff on Chinese electric cars and may have to implement even higher taxes. Analysts also mentioned that due to the US’s tough measures, the EU and China could come closer together.