Why it matters:
The sharper-than-expected tariff increase adds fuel to already volatile global trade tensions. It also hits at a time when the tech sector, sensitive to trade policy, faces a severe market downturn, amplifying economic uncertainty.
The big picture:
Trump’s tariff strategy has long defined his approach to China. But the new 145% figure represents a significant escalation, one that could have major implications for supply chains, consumer prices, and U.S.–China relations. The timing also coincides with extreme stock market swings, putting added pressure on investor confidence.
What he’s saying:
Trump had initially announced a 125% tariff in a social media post, declaring, “I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately.” Other officials echoed that number, contributing to confusion over the actual rate.
Key points:
- Trump’s total tariff on China is now 145%, not the 125% figure initially circulated.
- The higher rate reflects the addition of two separate 20% duties imposed earlier this year over fentanyl and immigration concerns.
- The Harmonized Tariff Schedule was amended to set the reciprocal tariff alone at 125%, while previous 20% tariffs remain intact.
- The Nasdaq dropped over 7% on Thursday, heading for its worst day since 2020, a reversal after its biggest rally since the dot-com crash on Wednesday.
- Tech giants saw sharp losses: Tesla (-10%), Apple (-6%), Meta, Amazon, Nvidia (-7 %), Microsoft, Alphabet (-4%).
Go deeper:
Wednesday’s market rally was fueled by Trump’s announcement of a 90-day pause on select tariffs and a 10% tariff ceiling for most countries, seen as a window for negotiation. But with the China-specific rate now far exceeding that, hopes for broader de-escalation may be short-lived. Traders are watching for signals on whether Trump will adjust the China policy or double down.
Hossein Vaez
