China’s retaliatory tariffs against the US have escalated tensions in the global economy. Sales accelerated in the markets, wiping out $6 trillion from Wall Street in just two days. The European Union also took action against the influx of cheap goods from Asia. Experts emphasized the significant danger to the world when the two countries strangle each other economically.

US President Donald Trump’s customs duties have shocked global trade. China responded promptly with retaliatory tariffs surpassing the US’s expectations. Trump imposed additional taxes on countries with which the US has a significant trade deficit. Import partners like the European Union faced increased tariffs of 20%, 34% for China, and 46% for Vietnam.

Reports suggest that China targeted Chinese companies as well through the high taxes imposed on Vietnam. Chinese companies were redirecting their products to the US through countries like Vietnam.

China also announced that it would impose tariffs at the same rate of 34% on the US. Additionally, China activated sanctions against the US’s export of rare earth elements and certain American companies.

BEIJING DELIVERS A BLOW TO TRUMP American companies selling in the Chinese market were severely affected by the tariff actions. Experts pointed out that China’s additional tariffs struck Trump right in the heart. Despite not appearing concerned about meeting food and other needs from various markets, analysts noted the interdependence of global trade and the risky prospect of the world’s two largest economies strangling each other. In February, Beijing imposed an additional 15% tax on US imported coal and natural gas as well as 10% on agricultural machinery. Furthermore, China initiated a 10% to 15% tax on $21 billion worth of American goods, including pork, chicken, soybeans, and other agricultural products, as retaliation to US tariffs until March 18th.

EARTHQUAKE IN THE US STOCK MARKET China’s retaliatory tariffs have expedited the sales in the US stock market, which had already been losing strength. At the close, the Dow Jones index lost over 2,200 points, dropping 5.5% to 38,314.86 points. The S&P 500 index decreased by 5.97%, reaching 5,074.08 points, while the Nasdaq index fell 5.82% to 15,587.79 points. The week’s decline in indices was 7.9% for Dow Jones, 9.1% for S&P 500, and 10% for Nasdaq. The sharp decline over two days led to losses exceeding $6 trillion, with approximately $10 trillion wiped out from US markets since Trump took office.

CHINA PREPARATION IN EUROPE As the barriers to entry for Chinese manufacturers into the US market increase, reports indicate that the European Union (EU) may face an unexpected wave of imports. The EU has prepared measures to prevent the influx of cheap goods from Asia into European markets. European officials are reportedly working on tightening import controls due to the tariffs imposed on China and Vietnam.

According to a report in the Financial Times, an EU diplomat stated that the EU applied customs duties of up to 35% on Chinese electric cars but may have to impose even higher taxes. Analysts also noted that due to the harsh US policies, the EU and China may come closer together.