China slapped additional duties of 34% on U.S. goods, set to go into effect April 10. It also announced curbs on exports of some rare-earths and added several U.S. firms to its export control list and the “unreliable entities” list, which allows Beijing to take punitive action.
The action followed U.S. President Donald Trump’s 34% duties on imports from China announced on Wednesday, which triggered a massive market meltdown on Thursday. The latest levies were on top of the 20% tariffs on China imposed earlier this year.
Investors were already fretting over potential supply chain disruptions, price hikes and demand destruction for everything from cars and smartphones to sneakers.
Shares of Tesla and Apple – among consumer tech companies with a large exposure to China – were down 8% and 4%, respectively. While both companies have local production in China, duties on U.S.-imported parts could squeeze margins and force price hikes.
“Several tech companies have established local supply chains in China. Most source components from China already, and hence, disruptions should be controllable, though we do expect price hikes on parts and components not being sourced from China,” said Nishant Udupa, practice director at research firm Everest Group. For Tesla, already in a bruising price war with local Chinese rivals, raising prices would pressure demand further. “Apple’s smartphone sales had already been declining in China for some time, faced with growing, cheaper competition. So, the prospect of steep import duties being imposed is likely to sharply erode sales even further,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
Shares of Alphabet, Microsoft and Amazon.com were subdued as they had limited exposure to China.
GE Healthcare’s stock slid nearly 13%, following China’s export controls on a rare-earth metal that is used in MRI scans. The country’s announcement of an anti-dumping investigation into imports of certain medical CT tubes from the U.S. and India added to the worries.
Chip stocks
Chip companies are set to face headwinds, too, although U.S. exports a much smaller amount of electronic equipment to China. Shares of Intel, Applied Materials and Qualcomm, all of which count on China for at least 30% of revenue, were down 5% to 8%.
The U.S. exported more than $15 billion worth of electrical and electronic equipment to China in 2024, with most of the value coming from integrated circuits, transistors and other semiconductor devices, according to economic data provider Trading Economics. In comparison, the U.S. imported more than $127 billion in electronic equipment from China last year.
“Semiconductors will feel a greater impact … We’re already witnessing a domestic ecosystem evolve in China, with direct alternatives for every major US semiconductor firm. This trend is likely to accelerate,” Udupa said.
Natural resources
Crude prices, already under pressure from an expected OPEC+ oil output hike in May, added to the losses.
Oil majors Exxon and Chevron fell more than 5%. Top oilfield service company SLB dropped 10%, and the biggest U.S. refiner by volume, Marathon Petroleum, fell 6%. Chemicals company DuPont slid 12%.
“The trade war escalated, recession fears rise and consequently oil demand growth is to take a sizeable hit,” said Tamas Varga, analyst at PVM.
China is also the largest market for U.S. agricultural products, even as imports of U.S. farm goods dropped last year.
Shares of top grain traders like Archer-Daniels-Midland fell 8% while Bunge was down 6%. Fertilizer firms Mosaic and CF Industries fell 10% and 8%, respectively.
China’s tariffs on U.S. soybean exports would increase the cost to local customers, especially animal feed producers, and could prompt the country to source more from Brazil and Argentina, said Morningstar analyst Seth Goldstein.
Banks
Banks’ shares extended their declines from Thursday. The industry has been clouded by fears that a trade dispute could temper consumer confidence, reduce spending, weaken loan demand and pressure fees from advising on deals.
JPMorgan Chase, the biggest U.S. bank by assets, sank 7%. Wall Street titans Goldman Sachs and Morgan Stanley dropped more than 7% each.
Machinery
Heavy machinery makers Caterpillar and Deere fell 5% and 4%, respectively, on concerns over demand from one of their largest overseas markets.
China is a major buyer of construction and agricultural equipment and a key player in global infrastructure spending.
Retail
Shares of major luxury and footwear firms reversed coursed after Trump said Vietnam’s leader To Lam has offered to reduce tariffs on U.S. imports. Ralph Lauren’s shares were up 2.5%, while Tapestry rose as much as 3.6%.
Nike gained 4%, Roger Federer-backed On jumped 7.2% and Lululemon Athletica rose 3%. The stocks had initially fallen after retaliatory tariffs by China, a major revenue contributor.
