Trump Tariffs Take Effect, Intensifying Market Sell-Off

WASHINGTON/SINGAPORE, April 9 (Reuters) – President Donald Trump's sweeping "reciprocal" tariffs officially took effect Wednesday, targeting dozens of countries and slapping a hefty 104% duty on Chinese goods. The move marks a dramatic escalation in the global trade war and has triggered fresh waves of selling across global financial markets.

The tariffs have rattled a global trading system that has stood for decades, stoking fears of a looming recession and wiping trillions of dollars from the market value of major corporations.

Since Trump first announced the tariffs last Wednesday, the S&P 500 (.SPX) has recorded its steepest loss since the index was created in the 1950s, now teetering on the edge of a bear market—defined as a drop of 20% from recent highs.

Even traditional safe-haven assets like global benchmark bonds were not spared in Wednesday’s turmoil. Investors were seen fleeing to cash amid signs of forced selling and growing unease.

Stock futures in both Europe and the U.S. pointed to further declines after a bleak trading day across most of Asia. Chinese markets remained relatively steady, bolstered by direct support from state-backed institutions.

Despite the mounting market anxiety, Trump appeared unfazed. While he has labeled the tariffs as “permanent,” he has also hinted they’re a strategic tool to push other nations to the negotiating table. “We have a lot of countries coming in that want to make deals,” he said during a White House event on Tuesday, later adding that he expected China to seek a deal as well.

Talks are already in motion with key U.S. allies South Korea and Japan, and Italian Prime Minister Giorgia Meloni is expected to visit Washington next week. Meanwhile, Vietnam's deputy prime minister, representing one of the hardest-hit manufacturing hubs, is scheduled to meet with Treasury Secretary Scott Bessent later Wednesday.

Optimism over potential trade deals had briefly lifted U.S. stocks earlier Tuesday, but those gains evaporated by the close of trading.

In Europe, the economic outlook is turning grim. German Finance Minister Joerg Kukies warned that Germany, the continent’s largest economy, faces a renewed recession due to trade tensions. Investment giant JP Morgan now puts the probability of a global recession by year-end at 60%.