Global stock markets tumbled on Friday after China retaliated against sweeping US tariffs announced by President Donald Trump, fueling fears of a prolonged trade war and a global economic downturn.
In the US, the S&P 500 dropped nearly 6%, with the Dow Jones and Nasdaq falling over 5% each, marking the worst week for American stocks since the 2020 pandemic crash. The UK’s FTSE 100 sank by 4.9%, its steepest decline in five years, while European and Asian markets also suffered major losses.
Trump remained defiant, urging Americans to “hang tough” and pointing to a strong labour market. However, analysts warned that the new tariffs, the largest since 1968, could significantly reduce global trade and tip many economies into recession.
China’s response included 34% tariffs on US goods, export controls on key minerals, and blacklisting of American firms, denouncing Washington’s actions as economic bullying. The EU signaled a willingness to negotiate but also pledged to protect its interests.
Sectors beyond trade, such as healthcare and utilities, were hit hard, though housing-related stocks showed resilience amid speculation about falling interest rates. Apple shares dropped more than 7%, bringing its total loss since Wednesday to around 15%.
JP Morgan raised the likelihood of a global recession this year to 60%, and small businesses, like a decades-old appliance store in New Jersey, are bracing for up to 40% price hikes.
Despite the market chaos, the White House defended its aggressive strategy as a long-overdue reset of global trade. Yet even allies like Senator Ted Cruz warned that escalating tariffs could lead to disastrous consequences if cooler heads don’t prevail soon.
