World markets found temporary relief Tuesday following a three-day downturn that erased trillions in share value, as China vowed to “fight to the end” over new U.S. tariffs. Despite the rebound, market sentiment remained fragile after President Trump’s sweeping tariff measures triggered global volatility.
Wall Street’s VIX volatility index stayed elevated at around 44, down from Monday’s high above 60. U.S. 10-year Treasury yields held steady after Monday’s largest one-day surge in a year, likely driven by investors liquidating assets amid market losses.
The American dollar remained weak under tariff pressures, while safe-haven currencies like the yen and Swiss franc approached six-month highs. Japan’s Nikkei index jumped six percent, and European shares recovered from 14-month lows, with London, Paris, and Frankfurt all up more than one percent.
China’s markets showed limited gains despite support from sovereign wealth funds. Taiwan’s benchmark index fell five percent after its worst drop on record. The Chinese yuan weakened to a two-month low before rebounding slightly.
China has responded with a 34 percent retaliatory tariff and rare-earth restrictions, while Trump threatens an additional 50 percent tariff, pushing total U.S. duties on Chinese goods this year to 104 percent. China’s commerce ministry condemned the escalation, calling it a “mistake on top of a mistake.”
With over $400 billion in Chinese exports to the U.S. annually, Beijing faces pressure as Trump’s tariffs target key strategies like production relocation and diversifying export markets. President Xi Jinping plans visits to Malaysia, Vietnam, and Cambodia—nations that previously benefited from China’s manufacturing shifts but now face steep levies.
The EU is also bracing for impact, offering a “zero-for-zero” tariff deal to the U.S. while preparing 25 percent counter-tariffs on American goods. Existing tariffs on autos and metals, along with new levies, add to European concerns.
Despite criticism from lawmakers and financial leaders, Trump maintains tariffs are necessary “medicine” for trade deficits, though economists widely dispute that rationale. Some within Trump’s circle, including Elon Musk, Bill Ackman, and Jamie Dimon, have expressed concerns, warning of an impending economic downturn if tariffs persist.
Source: Swifteradio.com
