China’s Xi Jinping calls Trump a bully, says America shouldn’t be allowed to be as powerful as it is

China’s President Xi Jinping told the world on Friday that Donald Trump is a “bully” and that America has no business being as powerful as it is. That came right after Trump’s White House slapped “reciprocal tariffs” on Chinese exports headed to the U.S.

The Chinese government called the new U.S. tariffs a violation of trade laws and promised to retaliate by taxing all American imports coming into China starting next week in a translated government statement.

A breakdown of China’s retaliatory tariffs

Beijing said the U.S. action “seriously undermines China’s legitimate rights and interests” and labeled it “a typical unilateral bullying practice.” With approval from the State Council, China confirmed it will add a 34% tariff to every U.S. import arriving after April 10 at 12:01 a.m.

The increase stacks on top of current tariffs and won’t be reduced or canceled under any of the country’s bonded or tax exemption programs, said China.

The announcement cited several domestic laws, including the Tariff Law of the People’s Republic of China, Customs Law, and Foreign Trade Law, along with international legal principles.

The response from markets was instant. Dow Jones Industrial Average futures dropped 900 points, a 2.2% loss. Futures tied to the S&P 500 fell 2.3%, and Nasdaq-100 futures dropped 2.6%. That was just the U.S.

Over in Europe, the damage spread. The Stoxx 600, which tracks major companies across the continent, was down 4.5% by mid-morning London time. The banking sector took the worst hit, falling 9.5% as investors dumped risky stocks.

Premarket trading in U.S. banks showed a clear reaction to the news. Morgan Stanley lost 5%, Goldman Sachs fell 4.5%, and both Citigroup and JPMorgan Chase were down more than 4%. Wells Fargo lost 5%, and tech stocks with business in China didn’t do much better. Tesla dropped 4.6%, while Apple fell 3.5%.

The sell-off dragged the S&P 500 back into correction territory, meaning it’s now down more than 10% since its all-time high in February. Small-cap stocks fared even worse. The Russell 2000 plunged over 6%, officially entering a bear market with a drop of 20% or more from its last peak.

US stock market value tanks by over $1 trillion as tech gets slammed

The damage hit tech hardest. CNBC’s Magnificent Seven index, made up of seven of the biggest tech companies that led gains in 2023 and 2024, tanked over 6% in one day. Altogether, those companies lost more than $1 trillion in market value. That kind of wipeout hasn’t been seen in months.

The Nasdaq Composite took the lead in losses for the week, falling 4.5% as investors pulled out of risky trades. The S&P 500 fell 3.3%, while the Dow dropped 2.5%. Both indexes are now heading for their worst week since September 2024, with losses posted in six of the last seven weeks. And Nvidia stock, $NVDA, has dropped below $100 for the first time since August 2024

As traders try to figure out where this fight goes next, eyes are now on the March jobs report set to drop later today. Economists polled by Dow Jones expect nonfarm payrolls to grow by 140,000, with the unemployment rate holding steady at 4.1%. But that report might not be enough to calm investors rattled by the escalating fight between Trump and Xi Jinping.

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