Dow futures were down more than 1,000 in pre-market trading Friday.
Thursday’s stock market crash continued Friday morning as Dow Futures were down about 1,000 points in pre-market trading, while the Nasdaq Composite was off about 500 points, or 2.6%, while the S&P 500 was also down around 130 points, or 2.4%.
The catalyst was reaction to U.S. President Donald Trump’s sweeping tariffs imposed on nations around the world Wednesday.
One of the hardest hit countries is China, which got slapped with a 34% additional tariff on top of the 20% tariff imposed in February.
“The US practice is inconsistent with international trade rules, seriously undermines China’s legitimate rights and interests, and is a typical unilateral bullying practice that not only undermines the interests of the United States itself but also endangers global economic development and the stability of the production and supply chain,” China’s Ministry of Finance stated in a release.
China responded Friday with a 34% retaliatory tariff on U.S. imports, which caused U.S. markets to tank.
The Ministry of Finance said that the State Council Tariff Commission would impose a 34% tariff on all U.S. imports starting April 10 unless the U.S. drops its tariffs.
“China urges the United States to immediately cancel its unilateral tariff measures and resolve trade differences through consultation in an equal, respectful and mutually beneficial manner,” the release said.
Also, Canada responded Thursday with a 25% tariff on auto imports from the U.S. And the EU Commission said Thursday it was prepared to retaliate with countermeasures if negotiations with the U.S. failed.
“We take these measures reluctantly. And we take them in ways that is intended and will cause maximum impact in the United States and minimum impact in Canada,” Prime Minister Mark Carney said, according to the AP.
Further, economists at JP Morgan raised their probabilities for a recession on Friday to 60%.
“Disruptive U.S. policies have been recognized as the biggest risk to the global outlook all year,” JP Morgan’s chief economist Bruce Kasman wrote in a research note, according to Newsweek. “We thus emphasize that these policies, if sustained, would likely push the US and possibly global economy into recession this year. An update of our probability scenario tree makes this point, raising the risk of a recession this year to 60%.”
An early consequence of the tariffs is that automaker Stellantis (NYSE:STLA) temporarily laid off 900 employees in the U.S., specifically at five Midwest plants in Michigan and Indiana, according to CNN..
The layoffs were because Stellantis paused production at plants in Canada and Mexico because of the tariffs. the temporarily laid off workers built parts for those plants, reported CNN.
