US Stock Market Crashes as China Retaliates with 125% Tariffs; Dow Plunges Over 1,000 Points, S&P 500 Tanks 3.5%

New York, April 10, 2025 – Wall Street was rocked on Thursday as escalating trade tensions between the United States and China triggered a massive sell-off across all major indices. The Dow Jones Industrial Average closed more than 1,000 points lower, while the S&P 500 plunged 3.5%, marking one of the worst trading days of the year.

The volatility was sparked by a sharp escalation in the US-China trade war, as Beijing retaliated to the latest round of tariffs imposed by the United States with new punitive tariffs of up to 125% on American goods. The announcement triggered a wave of investor panic, leading to intense intraday volatility and heavy selling pressure in key sectors like technology, industrials, and energy.

💥 China Strikes Back: 125% Tariffs on US Goods Effective April 12

The Chinese Ministry of Commerce announced that effective April 12, 2025, a new round of tariffs—as high as 125%—would be levied on a broad spectrum of US exports, including agricultural products, automobiles, industrial machinery, and consumer goods.

“If the US insists on continuing to substantially infringe upon China’s rights and interests, China will resolutely counterattack and fight to the end,” read the official statement from Beijing.

This hardline stance comes just days after US President Donald Trump authorized an aggressive increase in tariffs on Chinese imports, pushing total duties on most items to a staggering 145%. The initial statement had cited a 125% hike, but a White House clarification on Thursday confirmed the combined effective tariff rate is now 145%.

📉 Stock Market Highlights – April 10, 2025

• Dow Jones Industrial Average: ↓ 1,016 points (-2.8%)

• S&P 500 Index: ↓ 3.5%

• Nasdaq Composite: ↓ 4.1%, led by tech and semiconductor stocks

• Volatility Index (VIX): Surged over 18%, reflecting heightened investor fear

Key sectors hit:

• Technology (Apple, Nvidia, and Microsoft all down over 4%)

• Industrials (Caterpillar, Boeing fell more than 3%)

• Energy (Chevron and ExxonMobil slid amid global demand fears)

🌐 Global Trade War Intensifies: China Files WTO Complaint

In a further escalation, China has filed a formal complaint with the World Trade Organization (WTO) against the United States, challenging the legality of the newly imposed tariffs. This is expected to further complicate diplomatic relations and potentially delay any near-term resolution to the trade conflict.

The WTO filing accuses the US of violating international trade norms by implementing unilateral tariff hikes that disproportionately target China. Analysts believe that the complaint is symbolic, but it reinforces Beijing’s commitment to defending its interests through both diplomatic and economic channels.

🔎 Market Outlook: Investors Brace for Prolonged Volatility

The dramatic plunge in US markets underscores the fragility of global investor sentiment in the face of rising protectionism, geopolitical uncertainty, and sluggish global growth projections. Analysts are warning of continued market turbulence unless both nations return to the negotiation table.

“This is no longer just a trade dispute; it’s turning into a full-scale economic cold war,” said Julia Harris, Senior Market Strategist at Evercore ISI. “Markets are pricing in not just tariff impacts, but also potential supply chain disruptions, inflationary pressures, and slowing global demand.”

The Federal Reserve is now under pressure to respond with dovish monetary policy signals in its next meeting, as fears mount over the broader economic impact of the trade war.

📌 Key Takeaways: US-China Trade War Impact on Global Markets

• China retaliates with 125% tariffs on US goods, effective April 12

• US confirms total tariff burden on Chinese imports now stands at 145%

• China files official WTO complaint against the US

• Dow drops over 1,000 points, S&P 500 sinks 3.5%

• Nasdaq leads decline amid tech sector rout

• Market volatility expected to remain high in coming weeks