President Donald Trump’s sweeping new tariffs—including a 104% duty on Chinese imports—took effect Wednesday, intensifying a global trade war that has rattled markets and alarmed investors.
The S&P 500 dropped below 5,000 for the first time in nearly a year and is on the brink of a bear market. U.S. companies have lost $5.8 trillion in value since the tariffs were announced last week, the worst four-day slump since the index’s creation in the 1950s, according to LSEG data.
Asian markets also plunged, with Japan’s Nikkei falling over 3% and South Korea’s won hitting a 16-year low. Wall Street futures pointed to a fifth consecutive day of losses.
Trump described the tariffs as both “permanent” and a tool to pressure other nations into trade talks. “We have a lot of countries coming in that want to make deals,” he said Tuesday.
Negotiations are reportedly planned with South Korea, Japan, and Italy’s Prime Minister Giorgia Meloni, who is set to visit next week.
The White House nearly doubled tariffs on Chinese goods, up from 54%, in response to Beijing’s countermeasures. China, calling the move blackmail, has vowed to retaliate.