Global markets plunge as China announces 34% retaliatory tariffs against US

Global financial markets tumbled on Friday as China announced retaliatory tariffs of 34% on all US goods starting April 10, escalating trade tensions following sweeping tariff measures imposed by US President Donald Trump yesterday.

London’s FTSE 100 shed 313 points, or 3.7%, to 8,173 points by mid-morning, positioning the index for its steepest one-day decline since March 2023.

The sell-off intensified after China’s finance ministry unveiled the countermeasures that directly mirror the scale of US tariffs announced on Wednesday.

“This practice of the US is not in line with international trade rules, seriously undermines China’s legitimate rights and interests, and is a typical unilateral bullying practice,” China’s State Council Tariff Commission said in a statement.

Banking shares led losses in London, with Barclays plunging 10% and NatWest falling 9.5%. Aerospace manufacturer Rolls-Royce briefly dropped 12%, while mining giant Glencore declined 8.7% amid growing concerns about global economic slowdown.

Oil prices also suffered significant losses, with Brent crude falling 6.6% to $65.50 per barrel, reaching its lowest level since August 2021, as investors assessed potential impacts on global demand.

The market reaction extended across Europe, with the Stoxx 600 index, representing Europe’s largest six hundred companies, slumping 4.4%. Germany’s DAX index, particularly sensitive to trade tensions given the country’s export-oriented economy, dropped 5%.

The escalating trade conflict follows Trump’s announcement of increased duties on Chinese imports, creating uncertainty for international commerce and raising concerns about potential impacts on global economic growth.