By Gwurld4026 
Trade War Escalates: China’s Response to Trump Tariffs
Asian equity markets experienced significant declines on April 7, 2025, following China’s announcement of retaliatory tariffs in response to new U.S. trade measures. President Donald Trump’s recent “Liberation Day” speech introduced a two-tier tariff system, imposing a 10% baseline tariff on imports from all countries except Canada and Mexico, with additional country-specific tariffs targeting approximately 60 nations.
In retaliation, China declared a 34% tariff on all U.S. goods, effective April 10. This escalation heightened fears of a full-scale trade war, leading to sharp sell-offs in Asian markets:
- Hong Kong’s Hang Seng Index: Plummeted by 9%, with significant losses in tech, solar, banking, and retail sectors.
- Mainland China’s CSI300 Index: Experienced a decline of over 5%, reflecting widespread investor concern.
Other markets also felt the impact, with Singapore’s Straits Times Index falling by 8.7%. European markets were not immune, with the UK’s FTSE 100 reaching a one-year low, and Germany’s DAX index experiencing a 6% drop.