US stock markets continue slump as China hits back on Trump tariffs

Stock markets in the United States have seen another day of losses as President Donald Trump’s so-called reciprocal tariffs continue to cause global economic uncertainty.

At the close of markets on Friday, the Dow Jones Industrial Average was down by 5.5 percent, the Nasdaq Composite was down 5.8 percent, and the S&P 500 was down nearly 6 percent.

All told, the three indices saw their worst two-day stretch since March 2020 when the economic ravages of the COVID-19 pandemic took hold.

The sharp drops, which mirrored plunges in markets across the world, followed Trump’s announcement on Wednesday of wide-ranging reciprocal tariffs on nearly all trade partners. That included benchmark 10 percent tariffs on most partners, with specific tariffs as high as 50 percent on more than 60 countries.

Reporting from the New York Stock Exchange, Al Jazeera’s Kristen Saloomey said Friday’s tumble also came after China announced a 34-percent tariff on US goods, the most significant retaliation to date.

“This is all sparking fear of a global trade war and possible global recession, and that’s what we’re seeing play out here in the markets today,” she said.

For his part, Trump remained defiant as he attended the LIV Golf tournament at his Florida course after spending the night at his Mar-a-Lago estate.

“TO THE MANY INVESTORS COMING INTO THE UNITED STATES AND INVESTING MASSIVE AMOUNTS OF MONEY, MY POLICIES WILL NEVER CHANGE,” he wrote on the Truth Social platform, which he owns.

He also hailed a new report showing the US added 228,000 jobs in March, exceeding expectations. However, the report covered a period before the new tariffs were announced.

“HANG TOUGH,” he wrote. “WE CAN’T LOSE!!!”

The contrast of Trump attending a leisure event as markets tumbled was not lost on his critics, with the top Democrat in the Senate, Chuck Schumer, saying the president was in a “billionaire bubble”.

Senator Ben Ray Lujan, a Democrat, said, “While the American people are trying to put food on the table, I see that Donald Trump’s out there playing golf.”

Some Republicans, meanwhile, continued to come to Trump’s defence, with Republican Senator John Barrasso hailing Trump as a “deal maker” who would “deal country by country with each of them”.

Warnings on inflation, unemployment

The grim day on Wall Street came as Federal Reserve Chair Jerome Powell predicted higher inflation and unemployment in the wake of Trump’s “larger than expected” tariff programme.

“We face a highly uncertain outlook with elevated risks of both higher unemployment and higher inflation,” he told reporters.

Powell also doused hopes that the Fed could take swift actions to lessen the fallout. That included an appeal from Trump, who wrote on his Truth Social account that it would be the “perfect time” to cut interest rates.

Powell said it was too soon to determine what the response from the central bank should be.

Meanwhile, international reaction to the tariffs continued to roll in.

European Union trade commissioner Maros Sefcovic said he told US Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer that the 20 percent tariffs on the bloc were “damaging” and “unjustified”.

“The EU/US trade relationship needs a fresh approach. The EU’s committed to meaningful negotiations but also prepared to defend our interests. We stay in touch,” he added.

The United Nations also weighed in on the Trump policy, which has disproportionately affected poor countries in Africa and Southeast Asia who rely heavily on imposing tariffs on imports to generate government revenue.

Countries like Lesotho, Madagascar and Laos faced some of the highest tariffs from the Trump administration, which calculated each rate by halving what individual countries “charge” US exporters.

The trade turbulence from tariffs “hurts the vulnerable and the poor,” Secretary-General of UN Trade and Development Rebeca Grynspan said in a statement.

“Trade must not become another source of instability. It should serve development and global growth,” she said.