Trump's tariff war escalates: China imposes heavy counter-tariffs, Dax plummets

Beijing (China) - Trump's tariffs are plunging the financial markets into chaos. As part of his tariff package, Donald Trump (78) took particular aim at the Chinese economy. Beijing is now responding with corresponding countermeasures. Meanwhile, the DAX plummets.

On Wednesday, US President Trump imposed tariffs of 34% on Chinese products. Prior to the announcement, the US had already imposed tariffs of 20% on goods from China, the world's second-largest economy.

Now the Chinese have announced counter-tariffs of 34% on US imports. As a result, the Dow Jones Industrial fell by a further 5.50 percent to 38,314.86 points on Friday. The heavy losses were accompanied by far above-average trading volumes, which probably justify the term sell-off.

According to the Chinese Ministry of Commerce, the tariffs are to come into force on April 10. The Chinese government is also planning to file a complaint with the World Trade Organization (WTO) over the US tariffs.

The German share index (Dax) reacted immediately: the stock market barometer was already down 2.5 percent and then plummeted further and was down 5.0 percent at midday compared to the previous day's close. The DAX suffered the biggest loss in its history on October 16, 1989. At that time, the share index plummeted by 13 percent.

Analysts at investment bank JP Morgan now believe that the risk of a global recession as a result of Trump's tariff policy has risen from 40 to 60 percent, according to news agency Reuters.

Fears of a global economic slump also sent oil prices plummeting once again on Friday. Prices for North Sea crude oil and US crude oil fell to their lowest level since 2021, weighed down by the USA's aggressive tariff policy and China's response.

Meanwhile, the head of the US Federal Reserve, Jerome Powell (72), assumes that Trump's new tariff package will lead to higher inflation and slower growth.

"While uncertainty remains high, it is now clear that the tariff increases will be much larger than expected, and the same is likely to be true of the economic impact," Powell said. These included a higher inflation rate and slower growth. "The magnitude and duration of these effects remain uncertain."

Trump reacted to Powell's comments on his online mouthpiece Truth Social. This would be a "perfect time" for Powell to cut interest rates, he wrote. He was always late, "but now he could change his image, and quickly". He added in capital letters: "Lower interest rates, Jerome, and stop playing politics!" Trump is a critic of the Fed chief and an advocate of low interest rates.

First reported April 4, 12:57 p.m., updated at 10:23 p.m.