U.S. President Donald Trump announced that mutual tariffs had triggered a sharp decline in the Chinese stock market.
At 11:20 a.m. on the 7th (local time), Taiwan's Weighted Index was at 19,248.56, marking a decline of 9.62% from the previous transaction. The index fell below 20,000 at the opening of the market, a level not seen since August 5 of last year (19,830.88).
The mainland Chinese indices also plummeted. The Shanghai Composite Index is currently down 5.49% at 3,159.17 from the previous transaction. At 9:54 a.m., the decline had widened to 7.22%. The Shenzhen Composite Index is down 7.03% at 9,637.02. At 9:52 a.m., it had dropped by as much as 8.88% before recovering slightly. The Hong Kong Hang Seng Index is down 8.61% at 20,879.73. It fell to 9.4% at 9:55 a.m., the largest decline since October 8 of last year.
The sharp decline in the Chinese stock market can be attributed to the mutual tariff announcement made by the U.S. on the 3rd. China is subject to a total of 34% in mutual tariffs, while Taiwan faces a total of 32%. A basic tariff of 10% went into effect on the 5th, and differentiated individual tariffs by country will be added starting on the 9th.
With an additional universal tariff of 20% from February to March, China has faced a total of 54% in tariffs during the second term of the Trump administration. In response, on the 4th, China imposed a 34% retaliatory tariff on all U.S. imports and initiated countermeasures such as export controls on rare earth materials and sanctions against U.S. corporations.
Taiwan's stance is that there will be no retaliatory tariffs against the U.S. The day before, President Tsai Ing-wen indicated a plan to discuss a '0% tariff' trade agreement similar to the United States-Mexico-Canada Agreement (USMCA) between Taiwan and the U.S. However, President Trump has also threatened to impose tariffs on semiconductors, Taiwan's largest export, which is expected to increase the impact.