The U.S.-China trade war is escalating with each passing day. China’s Commerce Ministry has stated that it “will fight to the end” as U.S. President Donald Trump warned of over 100% tariffs on Chinese imports. Following the reciprocal tariffs announced on “Liberation Day,” China imposed an equivalent 34% duty on import of U.S. goods. In retaliation, Trump warned China to take down these tariffs immediately or face additional 50% tariffs on Chinese imports. China says that the U.S.’ threat of further tariffs is a “mistake on top of a mistake” and vowed to continue countermeasures to protect its own interests.
The U.S.-China Trade War Gets Intense
China has called the retaliatory tariffs a form of “blackmailing” and insists that it will not be daunted by such tactics and will continue to fight till the end. Trump had given China until April 8 to revoke the 34% additional tariffs, which are in addition to the long-term trading duties already in place. However, China has sought to fight back and Trump’s proposed 104% tariffs could become effective from April 9. Trump has also warned that the U.S. may cease all dialogue with China.
The U.S.-China war is having a swamping impact on global stock markets. The 10% tariffs on all U.S. imports went into effect on Saturday, April 5, and the targeted duties of up to 50% on goods from different nations are due to take effect tomorrow, April 9. Notably, the total value of all goods traded between the U.S. and China in 2024 stood at $582 billion, making China the largest trading partner of the U.S. last year.
Global stock markets took a temporary halt from their decline yesterday, when rumors of a 90-day pause on tariffs did the rounds. However, the White House quickly refuted the reports, calling them “fake news,” and reaffirmed its intention to go ahead with the tariffs as planned.
Trump is keen to go through the temporary pain because he believes the end result would be highly beneficial. He has even referred to tariffs as “medicines” that are needed to fix the situation. However, these tariffs could very well lead to higher product prices, reduced demand, and a potential recession. The U.S. administration has also rejected negotiation offers from Vietnam and the European Union. These actions could push the tariffs-hit countries to seek favorable trade agreements with other nations, potentially leaving the U.S. out from such deals.
Is SPY a Good Buy Right Now?
Analysts have a Moderate Buy consensus rating on the SPDR S&P 500 ETF Trust (SPY) based on 408 Buys, 88 Holds, and eight Sell ratings. Furthermore, the average SPY price target of $680.11 per share implies 34.8% upside potential. Year-to-date, SPY stock has lost 13.7%.
