Tariffs pause fails to calm Wall Street

S&P 500 falls 3.5%, showing that fears about US economic growth are still alive

- JOE RENNISON ESHE NELSON RIVER AKIRA DAVIS

he stock market resumed its slide on Thursday, as the White House clarified that Chinese imports would face a tariff of 145%, prompting renewed investor angst over an escalating trade war between the world’s two largest economies.

The S&P 500 fell 3.5%, a day after recording its best gain since 2008. The drop erased much of Wednesday's 9.5% rise and showed that fears that tariffs could hamper economic growth were still very much alive.

Thursday's drop brought a continuation of the chaotic trading conditions and sharp losses that have characterised the stock market since President Donald Trump’s announcement last week of steep tariffs across the nation’s trading partners. As stocks slid again, the wild swings in government bonds caught the attention of policymakers who are watching to ensure that one of the most crucial financial markets in the world continues to function smoothly.

Investors had welcomed Trump's 90-day reprieve on higher tariffs, and the market soared within minutes of the announcement on Wednesday. The pause applied to all countries except China, which investors had thought would face an import tax of 125%.

But stocks began to drop on Thursday morning as analysts noted that even with the tariff pause, countries still faced a new blanket 10% tariff — already much higher than before. Tariffs recently imposed on cars and auto parts, and steel and aluminium, would also remain in place. Then the White House clarified that the new 125% tariff on Chinese imports was on top of earlier 20% tariffs, taking the number to 145%.