By Elaine Kurtenbach, Associated Press Business Writer
BANGKOK (AP) – Global shares were surprised Friday after the latest escalation in the China-US trade war.
The future of the S&P 500 rose 0.7%, while the future of the Dow Jones Industrial Average rose 0.4%.
President Donald Trump’s serious concern over the trade war led to Tokyo’s benchmark dropping by more than 5% at first. He then regained the ground and closed 3% lower at 33,585.58.
China then announced it was raising tariffs on US exports to 125%, matching the level of US tariffs that had not been imposed a few weeks ago.
“The US has become a game of numbers to alternately raise unusually high tariffs in China, but it has no practical economic importance and is a joke in the history of the world economy,” a spokesman for the Treasury Department said in a statement announcing the new tariffs. “However, if the US insists that it will continue to effectively infringe on China’s interests, China will resolutely refute and fight to the end.”
Earlier on Friday, the 10-year financial yield was 4.40%. The market swing collided with the bond market, and the Treasury yields rose as bond prices sold significantly.
The bond market has tended to limit economic policies investors deemed rude, and helped defeat the UK’s Liztrus in 2022. For example, 49 days became her shortest serving prime minister in Britain.
President Trump said the bond market was a bit “impedic” when he announced a 90-day delay in implementing his higher tariffs on dozens of countries.
10-year Treasury yields reached nearly 4.50% on Wednesday morning, starting from just 4.01% at the end of last week. The tariffs calmed somewhat after Trump’s U-turn at Wednesday’s tariffs, returning to 4.30% shortly after the better-than-expected forecast report was released on Thursday morning.
In early European trades, German DAX flowed from 1% to 20,353.16, while Paris’ CAC 40 lost from 0.4% to 7,100.90. The UK’s FTSE 100 received 0.5% as it reported the sixth largest economy in the world. This enjoyed growth in February before US President Donald Trump began rolling out tariffs on imported goods. It expanded by 0.5% in February, showing a more modest increase of 0.2% ahead of market expectations.
Korean Cospi fell 0.5% to 2,432.72, while in Australia the S&P/ASX 200 went from 0.8% to 7,646.50.
The Chinese market came together after Chinese President Xi Jinping met with Spanish Prime Minister Pedro Sanchez, and Beijing announced plans for XI to visit Vietnam, Malaysia and Cambodia.
China has been trying to join forces with other countries in clear hopes of forming a united front against Trump. The world’s second largest economy is also stepping up its own measures against Trump’s tariffs.
Hong Kong’s Hangsen rose 1.1% to 20,914.69, while the Shanghai Composite Index rose to 0.5% to 3,238.23.
Taiwan’s Taiex scored 2.8% as the island’s high-tech products orders predicted trade between the US and mainland China would decrease.
On Thursday, the S&P 500 sliced into a 9.5% surge on Wednesday following Trump’s decision to overturn 3.5% and suspend many of his tariffs around the world. Dow Jones’ industrial average fell by 2.5%, while Nasdaq’s composites fell by 4.3%.
Investors are seeing Trump’s decision to delay tariffs in most countries for 90 days, not pivot, rather than 90 days. According to Stephen Innes of SPI Asset Management.
“It’s a market that’s putting the brakes on. The height of sugar since Trump’s tariff suspension is fading fast,” he writes.
The loss in US stocks accelerated after the White House revealed that the US would tax Chinese imports 145%. This wasn’t the 125% rate Trump wrote in his Truth Social post Wednesday, and not the 125% rate after including other previously announced tariffs. The S&P 500’s drop exceeded 6% at one point.
In other transactions earlier Friday, US benchmark crude added 47 cents to $60.54 per barrel in electronic trading on the New York Stock Exchange.
International standard Brent Crude added 40 cents to $64.73 per barrel.
For $1, I bought 142.58 yen, starting from about 145 yen a day ago. The euro rose from $1.1200 to $1.1380.
Associated Press writer jiang junzhe made a contribution from Hong Kong.
Original issue: April 11, 2025 7:41am EDT
