Stocks in the U.S. and overseas dropped sharply for a second day on continued fears that President Trump’s sweeping tariffs on foreign imports would ignite a massive trade war and lead to an economic recession.
Adding fuel to the stock downward spiral: The Chinese government announced Friday a blanket 34% tariff on American products, effective April 10. China is the second-largest importer of goods to the U.S. (after Mexico). China is the third biggest export market for the U.S., after Canada and Mexico.
On Friday the S&P 500 was down 2.5% at market open. That came after the index fell 4.84% Thursday — its worst daily decline since 2020. Major media and tech stocks that saw declines again Friday included Disney (-3.5%), Apple (-3.6%), Amazon (-4.8%), Roku (-6.5%), Warner Bros. Discovery (-6.4%), Sony (-5.2%) and Netflix (-2.2%).
The Trump tariffs, scheduled to go into effect April 9, set a 10% baseline levy on imports from all countries, with higher rates for certain regions and countries including China (34%), South Korea (25%), Japan (24%), Taiwan (32%) and the EU (20%).
In a statement Friday, China’s Finance Ministry said, “This practice of the U.S. is not in line with international trade rules, seriously undermines China’s legitimate rights and interests, and is a typical unilateral bullying practice.” On his Truth Social social media platform, Trump posted Friday morning, “CHINA PLAYED IT WRONG, THEY PANICKED – THE ONE THING THEY CANNOT AFFORD TO DO!”
While the Trump tariffs will not impose direct cost increases on Hollywood, analysts say rising costs and a potential recession would lead consumers to cut their discretionary spending on media and entertainment and prompt marketers to scale back advertising budgets.
Speaking briefly with reporters Thursday outside the White House about the effects of his tariff plan, Trump said, “I think it’s going very well. The markets are going to boom, the stock is going to boom, the country is going to boom.” Trump then departed D.C. to fly to one of his Florida golf clubs.
Also Thursday, Trump against suggested that he would consider reducing tariff rates on China if the country approved a sale of TikTok. “I think that maybe China will call and say, ‘Well, we’re upset with the tariffs,’ and maybe they want to get something a little bit in order to get TikTok approved,” Trump told reporters on Air Force One.
Ahead of the new tariffs taking effect, U.S. consumers are rushing to buy products subject to the higher levies like HDTVs and workout apparel as well as stocking up on groceries, the Wall Street Journal reported.