China’s tariffs on US fail to dampen stock market euphoria over Trump’s tariff pause

Donald Trump’s pause on tariffs for over 75 countries sparked euphoria on Wall Street, leading to historic rebounds in its major indexes. The optimism spread to Asia, where stock markets, including those in Southeast Asian countries hardest hit by the tariffs, returned to gains. Even China’s 84% retaliation tariff on U.S. products couldn’t dampen investor confidence.

The tariffs imposed by the Communist government in Beijing took effect early Thursday (local time). The customs duties will apply to all U.S. products entering the world’s second-largest economy. In 2024, the total value of these goods was $143.5 billion, according to data from the U.S. Trade Representative's office, as reported by AFP.

The trade war between the two global giants continued to escalate. Trump raised his tariff to 125% and excluded these goods from the pause on most imports from the rest of the world.

Bullish rally pending Beijing's response

While awaiting Beijing's response—so far, a matching tariff hike on U.S. products—Asian stock markets continued the rally that began on Wall Street Wednesday afternoon following Trump’s announcement, posting historic gains in some cases.

For example, Taiwan's main index surged 9.3%, while Japan's Nikkei gained 9.1% by the close. Countries most affected by Trump's tariffs, such as Vietnam (+6.90%) and Thailand, also joined the bullish rally. The Association of Southeast Asian Economic Nations (ASEAN) countries announced they would not retaliate against U.S. tariffs, choosing instead to engage in dialogue with the world’s leading economy.

China's stock markets close in the green despite escalation in the trade war

Stock markets in the U.S.'s main adversaries also ended in the green, despite experiencing fluctuations, particularly after Trump announced an increase in tariffs on their products. By the end of the session, Hong Kong posted gains exceeding 2%, while the Shanghai index rose by 1.01%.