Two days after President Trump announced his expansive global tariffs, the United States confronted wide-ranging blowback, with China retaliating against American goods and markets falling sharply on worries of a persistent and damaging trade war.
No portion of the global economy appeared unscathed as the world braced for Mr. Trump to begin imposing his nearly across-the-board taxes on imports Saturday, marking his first salvo in a potentially costly trade conflict meant to reset U.S. economic relationships.
China, which Mr. Trump has already hit with 20 percent tariffs, announced plans to retaliate. Beijing promised to impose a 34 percent tariff on American goods next week, including on agricultural products. China calibrated its tariffs to match Mr. Trump’s decision to add a 34 percent tax to Chinese imports.
The tit-for-tat immediately upended financial markets, as Wall Street reckoned with the rising odds of an escalating global trade standoff. The S&P 500 fell Friday about 5 percent, a nosedive on the heels of its worst day since 2020, while the tech-heavy Nasdaq appeared on track to retreat into a bear market, a widely used Wall Street term for a decline of at least 20 percent from its peak.
As China took aim at the United States, Ngozi Okonjo-Iweala, the director general of the World Trade Organization, warned on Friday against a “cycle of retaliatory measures that lead to further declines in trade.” In the United States, Jerome H. Powell, the chair of the Federal Reserve, struck his own downbeat note over the unpredictable trajectory of the economy.
“While uncertainty remains elevated, it is now becoming clear that the tariff increases will be significantly larger than expected,” Mr. Powell said. “The same is likely to be true of the economic effects, which will include higher inflation and slower growth.”