Trump tariffs on China set to rise to 104% Wednesday; markets sink again
Editor's Note: This page is a summary of tariff news for Tuesday, April 8. For the latest news, view our story for Wednesday, April 9.
The Trump administration will hit China with 104% tariffs starting at 12:01 a.m. Wednesday, the White House said Tuesday.
President Donald Trump had threatened an extra 50% on tariffs against China − in addition to an initial 20% that was supplemented by 34% "reciprocal'' levies Wednesday − after Beijing said it would respond with a 34% tax of its own.
On Tuesday, White House press secretary Karoline Leavitt told reporters the full package of more than 100% in levies would kick in overnight.
"It was a mistake for China to retaliate," she said. "When America is punched, (Trump) punches back harder, and that's why there will be 104% tariffs going into effect on China tonight at midnight."
The big blow's announcement likely contributed to a sharp reversal of fortunes on Wall Street, where a day that began with major gains later headed south. All three main indexes closed down, from 0.84% to 2.15%.
Leavitt said Trump wanted her to tell reporters that if China "reaches out to make a deal he will be incredibly gracious, but he's going to do what's best for the American people."
Leavitt declined to say what it would take for Trump to pull back on the tariffs, saying it would be imprudent for her to share those conditions from the podium.
Stocks plummet after early rebound amid tariff negotiations
Global markets at first bounced back Tuesday as Trump and his top advisers said scores of countries have contacted the administration to open tariff talks, but tensions with China remain high and by the afternoon the gains had turned into significant losses.
The blue-chip Dow erased 1,400 points in gains and wound up dropping by 0.84%, or 320.01points, to 37,645.59; the broad S&P 500 slid 1.57%, or 79.48 points, to 4,982.77; and the tech-heavy Nasdaq slumped 2.15%, or 335.35 points, to 15,267.91.
U.S. stocks had swung wildly Monday, opening lower, then briefly popping higher on a report − later denied − that Trump would delay tariffs for 90 days, before dropping again on a new Trump threat to levy an additional 50% tax on China if it didn't retreat from its 34% retaliatory tariff planned for Thursday. Volume was the highest in at least 18 years: roughly 29 billion shares changed hands.
Tough talk to and from China regarding tariffs
Beijing on Tuesday issued a stern rebuke in response to Trump's threat of an additional 50% tax on Chinese imports, calling the move "blackmail" and vowing to "fight to the end."
Trump wrote on his social media platform that China has not contacted the U.S. but said he believes Beijing wants to make a deal: "We are waiting for their call. It will happen!"
Treasury Secretary Scott Bessent called China's defiant response to Trump's threats of higher tariffs "a big mistake." In a Fox News interview, Bessent said leaders from about 70 countries have reached out for tariff negotiations and that, depending on what they offer, the U.S. "can end up with some good deals."
The sentiment was echoed by Trump, who said he spoke with South Korea’s acting president, Han Duck-soo, and that the country wants to make a deal, as do "many" other nations.
Trump says the US is already taking in $2 billion a day from tariffs
Trump on Tuesday claimed the U.S. is already taking in $2 billion a day from his recently imposed tariffs as he defended what he called “explosive” duties on imports that have rattled the markets.
“That’s a lot of money,” Trump said at a White House event in which he signed a series of executive orders aimed at revitalizing the depleting coal industry in the U.S.
Trump did not explain how he calculated the revenue collections. A 10% baseline tariff on all imports went into effect on Saturday. On Wednesday, Trump’s additional tariffs on more than 60 countries are set to begin including 104% tariffs on imports from China.
– Joey Garrison
Is a trade deficit a bad thing? Not necessarily
In his campaign to impose tariffs on foreign countries near and far, Trump has presented those nations as ripping off Americans because of the United States’ longstanding trade deficit. But is that accurate?
Experts say trade deficits are not inherently good or bad and can be the result of a country becoming a desirable destination for foreign investment, as is the case with the U.S. and its highly regarded currency, the dollar. Other nations export their goods to America so they can acquire dollars.
Buying imported goods can be cheaper than purchasing domestic products because of higher wages and the cost of necessities like electricity in the U.S.
“Deficits themselves are not unfair,” said Christopher Barnes, president of the market research firm Escalent. “There are just things that developed economies are going to buy from lesser developed economies.”
− Rachel Barber
Tariffs may cause double-digit hikes in health insurance premiums
Health care companies are delaying projects, changing budgets and shifting costs to health insurers and patients in anticipation of tariff-related economic harms, according to a new survey by Black Book Research.
The firm surveyed 200 health-care leaders at hospitals, health systems, pharmaceutical and medical equipment manufacturers, health insurers and computer vendors. The survey was conducted March 6 through April 2, the day announced a 10% tariff on most imported goods. The survey doesn't reflect the triple-digit tariffs on Chinese imports announced Tuesday.
Among hospital chief financial officers, 75% began "short-term cost shifting" to health insurers and patients and 29% considered staff restructuring or wage freezes. Nearly all of the hospital finance officers are delaying computer and technology upgrades.
Consumers can expect a direct hit too. All but 5% of health insurance executives anticipate higher medical bills will yield double-digit premium hikes on health insurance plans next year.
− Ken Alltucker
Trump prioritizing allies in tariffs talks, adviser says
Trump's top economic adviser said Tuesday that he has put together a proposal outlining the countries that should receive priority for meetings amid requests for tariffs negotiations.
Kevin Hassett told Fox News that Trump is prioritizing talks with America’s top allies and trading partners, such as South Korea and Japan. He spoke to the leaders of both nations this week.
“There are a heck of a lot of concessions on the table,” Hassett said. “In the end, the president of course is going to be the one who decides whether the deal is good enough to change his mind about the tariffs.”
Making iPhones in US a pipe dream, analysts say
Will iPhones be made in America? “Absolutely,” says White House press secretary Karoline Leavitt. Not so fast, say industry insiders.
While Trump administration officials and even the president himself, according to Leavitt, envision a day when the ubiquitous phones are manufactured domestically, Apple analysts say it’s a political pipe dream.
"The president believes the U.S. has the capability to make iPhones," CNBC’s Kelly Evans said to Laura Martin, senior entertainment and internet analyst at Needham & Co. "Yeah, I don't think that's a thing," Martin replied.
Apple makes most of its iPhones in China, which the White House said is about to get slammed first thing Wednesday morning with a 104% tariff rate on the products it sends to the U.S. Apple shares were down 5% Tuesday.
“Saying we can just make this in the USA is a statement that incredibly understates the complexity of the Asia supply chain and the way electronics/chips/semi fabs/hardware/smartphones, etc., are made for US consumers over the last 30 years,” Wedbush Securities’ Daniel Ives said in a research note.
− Jessica Guynn
Trump top trade official defends tariffs to Congress
U.S. Trade Representative Jamieson Greer defended Trump's controversial tariffs during a Tuesday morning hearing before the Senate Finance Committee.
"We must move away from an economy that is based solely on government spending and the financial sector, and we must become an economy based on producing real goods and services that provide jobs for working-class and middle-class Americans in their communities," Greer said.
"This adjustment may be challenging at times, and in a moment of drastic overdue change, I'm confident, I'm certain, the American people can rise to the challenge as they've done before," he added.
Republicans on the committee acknowledged the stock market plummeting and other potential economic costs of the tariffs but indicated they were hopeful Trump's policies would also have positive effects.
Sen. Ron Wyden, D-Oregon, the top Democrat on the committee, said Trump and his advisers have not provided "any explanation" for what the tariffs are meant to accomplish. "The U.S. economy has gone from the envy of the world to a laughingstock in less time than it took to finish March Madness," he said.
– Riley Beggin
GOP lawmakers like NC's Tillis concerned, 'skeptical'
The tariffs and their aftermath are making some Republicans in Congress nervous about backlash from their constituents, be it in town halls or in next year's midterms.
Sen. Thom Tillis, R-N.C., expressed deep skepticism of the policy to Greer at Tuesday's hearing, saying, “Whose throat do I get to choke if this proves to be wrong?” Tillis, one of the most vulnerable Republican senators up for reelection in 2026, suggested to Greer that the administration has until February next year to fix the economy before voters will punish Republicans at the ballot box. “I wish you well,” he said, adding he is “skeptical.”
– Riley Beggin
Trump says South Korea deal may be imminent
Trump said Tuesday that a deal with South Korea may be on the horizon and added that "many other countries" want to bargain, including China.
“We have the confines and probability of a great DEAL for both countries,” he said on Truth Social, describing his call with South Korea's acting President Han Duck-soo. “Their top TEAM is on a plane heading to the U.S., and things are looking good.”
Trump added that his team is fielding calls from other nations and negotiations involve more than just trade and tariffs.
Indonesia announces slew of concessions
Indonesia's chief economic minister said Tuesday the country will buy gas and soybeans from the U.S. and reduce taxes on electronic goods and steel as part of ongoing negotiations.
Airlangga Hartarto made the announcement at a conference discussing how to respond to U.S. tariffs. Hartarto is set to lead a delegation traveling to Washington on April 17.
A 32% tariff on imports from Southeast Asia's biggest economy is set to take effect early Wednesday.
British finance minister: 'A trade war is in nobody's interest'
British finance minister Rachel Reeves said Tuesday that she would soon meet Bessent as London hopes to reach a deal to reduce the tariffs imposed by Trump.
"A trade war is in nobody's interest," she said, speaking to Parliament. "It is why we must remain pragmatic, cool-headed and pursue the best deal with the United States that is in our national interest."
Trump has imposed a 10% tariff on most imports from Britain and a 25% tariff on key sectors such as cars and steel.
Treasury secretary: China playing 'a losing hand'
Bessent criticized China's defiant response to Trump's threats of higher tariffs, saying such a stance would not accomplish anything.
"We are the deficit country," the Treasury secretary said in an interview with CNBC. "So what do we lose by the Chinese raising tariffs on us? We export one fifth to them of what they export to us. So that is a losing hand for them."
Bessent said "good deals" could come out of tariff negotiations, which he said “had nothing to do with sliding markets.”
Small businesses bracing for tariff-related hardships
With markets swinging worldwide, a small-business lending company executive is among those asking whether the Trump tariffs are permanent or temporary.
“What is the true intent and what does this all mean for America’s future, especially for small businesses?” said Ben Johnston, chief operating officer of Kapitus, a small business lender and marketplace. “The magnitude of these tariffs surprised me and most small business owners I know, as the markets are trying to find a floor. I don’t think anybody knows the real answer.”
Johnston said small businesses, which employ nearly 50% of Americans working in the private sector and account for 40% of the nation’s gross domestic product, will be hit especially hard by the strain likely created by the tariffs. He said wholesalers, retailers and construction contractors heavily dependent on imported goods will probably take fewer risks in the new environment.
“They know costs are going to rise, they are examining their supply chains and trying to determine what those tariffs will do to their margins and how they may have to pass off those costs to their customers,” Johnston said. “We’ve already seen consumer sentiment fall. Now we’re watching to see if any real hardship among small businesses lies ahead.”
− Terry Collins
'Nobody but me': Trump defends tariffs amid market swings
Trump defended his massive tariffs as the stock market nosedived further, saying the U.S. has an “opportunity to reset the table on trade.”
"Nobody but me would do this," Trump said. "You know, it's nice to serve a nice easy term, but we have an opportunity to change the fabric of our country."
Trump also said his tariffs can remain permanent even though he’s engaging with Japan and other nations on negotiations.
“They can both be true,” Trump said. “There can be permanent tariffs and there can also be negotiations because there’s things we need beyond tariffs.”
What is a recession?
A recession is informally considered at least two straight quarters of declining economic output. But the technical definition is “a significant decline in economic activity that is spread across the economy and lasts more than a few months,” according to the nonprofit National Bureau of Economic Research.
The measure is based on employment, income, consumer spending and industrial production, among other criteria. An economic tailspin is typically accompanied by hundreds of thousands or millions of net job losses.
What is a stock market correction?
Correction territory is generally understood to mean a stock market indicator has dropped at least 10% from its recent market high. This is different from bear market territory, which refers to a stock market drop of 20% or more from a recent peak, or a closing high.
Every investment is susceptible to corrections. They can apply to individual stocks, bonds, or stock indexes such as the Dow, S&P 500, and Nasdaq.
Several things can prompt a correction including a change in economic policy, newly released jobs or inflation data and company earnings reports.
−Rachel Barber
Contributing: Reuters