Global Markets Plunge as China Retaliates in Escalating Trade War
The FTSE 100 suffered a sharp decline after China announced retaliatory tariffs against the U.S., intensifying the global trade war. The UK’s benchmark stock index dropped as much as 3.9%, marking its steepest fall since the outbreak of the Ukraine war if losses persist.
Germany’s DAX also tumbled at its fastest rate since the early COVID-19 lockdowns after Beijing revealed plans to impose a 34% tariff on all American goods entering China, the world’s second-largest economy, starting Thursday. The move matches the 34% duties announced by U.S. President Donald Trump a day earlier, though the U.S. had already imposed an additional 20% tariff on Chinese imports.
Wall Street faced heavy losses in premarket trading following a disastrous session that wiped $2.4 trillion from the market value of S&P 500 companies—the largest single-day drop since the pandemic-triggered market crash five years ago. In a stark warning titled *“There Will Be Blood,”* JPMorgan increased its forecast for a global recession this year from 40% to 60%, citing President Trump’s aggressive trade policies. The bank described his latest tariffs—dubbed *“liberation day”* measures—as the biggest tax hike on U.S. households and businesses since 1968.
Asian markets were not spared, with Japan’s Nikkei closing the week down 9%, its worst performance since the early days of the pandemic in March 2020.
Amid the financial turmoil, President Trump claimed that UK Prime Minister Keir Starmer was *“very happy”* with how the U.S. had treated Britain in the trade negotiations. Trump referenced his recent decision to approve the transfer of the Chagos Islands from Britain to Mauritius, stating he had a *“very good dialogue”* with the Prime Minister.
The U.S. had imposed a 10% tariff on British goods as part of its sweeping *“liberation day”* import taxes, the lowest rate applied to any nation. Speaking to reporters aboard Air Force One, Trump said, *“I think he was very happy about how we treated them with tariffs.”*
Despite the market chaos, the president downplayed concerns, calling the volatility *“to be expected”* given the *“terrible economy”* he inherited. The escalating trade tensions have left investors bracing for further disruptions as the world’s largest economies dig in for a prolonged economic standoff.
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