NextGenInsight.Net

TARIFF BOMB FEAR

April 8, 2025

Billy Yang

● Tariff War Escalation, US-China Trade Threat

The US-China trade tensions began when the United States imposed an initial tariff of 34%.
China expressed its intention to respond with retaliatory tariffs of 34%, but the United States announced that it would not stop there and would further increase tariff bombs.
In particular, the U.S. announced an additional tariff increase of 50%, followed by 104%, effective from 12:01 AM Eastern Time on April 9, which caused a major shock to the market.

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[1] U.S. Initial Tariff Imposition and Response Trends

The 34% tariff initially imposed by the U.S. on China was intended to protect core U.S. interests, in addition to trade negotiations.
In response, China took a tough stance, announcing a 34% tariff as a natural retaliatory measure.

[2] U.S. Additional Tariff Increase and Time-Specific Announcement

The U.S. government, judging that China would not stop at the initial response, implemented a phased attack, steadily increasing the tariff increase from 50% to 104%.
The announcement that this milestone-like measure would be applied from 12:01 AM on April 9, U.S. Eastern Time, quickly spread anxiety and panic in the market.

[3] Impact on Global Stock Markets and Investment Sentiment

Initially, the Nasdaq and S&P 500 showed an optimistic atmosphere with gains of more than 4%, but the sudden worsening of the U.S.-China conflict caused stock prices to plummet.
In this situation, investors quickly switched to selling, fearing increased import costs and increased economic uncertainty in the short term.

[4] U.S. Internal Political Conflicts and Trump-Side Controversy

Internal division of opinions was revealed as Treasury Secretary Scott Cent and Trump expressed somewhat conflicting positions on tariff negotiations.
On the Trump side, in a call with Acting Representative Han Deok-soo, various trading possibilities were suggested, such as the U.S. trade surplus, shipbuilding, LNG transactions, and the Alaska Pipeline, implying room for negotiation.
On the other hand, China showed signs that the depth of conflict would increase as it stated that it would not back down from its strong response to the U.S.'s additional tariff threats.

[5] Emergence of Additional Economic Instability Factors Such as Foreign Withholding Tax Discussions

Along with the remarks of White House-related advisors, controversy arose that foreigners should also participate in the burden of U.S. global public goods costs.
In this process, the possibility of reviving the foreign withholding tax system, which was abolished in 1984, was mentioned, amplifying anxiety among U.S. bond and stock investors.
Ultimately, this suggests that the U.S.-China trade war could expand into a structural problem affecting the overall global economy, beyond a simple tariff war.

[6] Future Outlook and Investment Strategy

Although there is a possibility of a reversal if both Trump and China show weakened appearances or find a clue for dialogue during the remaining time, the current market is likely to move in a negative direction in the short term.
From the perspective of investors, it is time to avoid short-term risks while carefully responding to global economic trends.

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< Summary >

Latest Trends in the US-China Trade War

The US-China trade conflict unfolded in the order of the U.S.’s imposition of a 34% tariff, China’s retaliation, and the U.S.’s announcement of an additional 50%→104% tariff increase.
The stock market fell into shock from the initial rise, and internal division of opinions on the Trump side and the possibility of reviving the foreign withholding tax were mentioned.
The situation is a mix of global economy, tariffs, Trump, US-China trade, and investment issues.

1. U.S. Tariff Imposition and Chinese Retaliation

After the U.S. imposed the first 34% tariff, China announced equal retaliatory measures, but the U.S. proceeded with additional tariff increases.

2. Additional Tariff Increases and Market Reaction

The U.S. increased tariffs from 50% to 104% and took effect on April 9, and the stock market turned into a panic state.

3. U.S. Internal Conflict and Discussion of Foreign Withholding Tax

Differences in positions between Trump and the Secretary of the Treasury are revealed, and concerns about the burden on foreign investors are amplified.

*YouTube Source: [내일은 투자왕 – 김단테]

– 보복관세 104%? 미중갈등 극단으로 간다. 관세보다 더 큰 위협은?

● Tariff War Escalation, US-China Trade Threat The US-China trade tensions began when the United States imposed an initial tariff of 34%.China expressed its intention to respond with retaliatory tariffs of 34%, but the United States announced that it would not stop there and would further increase tariff bombs.In particular, the U.S. announced an…