104% China tariff is live — even Musk seems perturbed

Trump tariffs have officially kicked in — and they include a ghastly 104% duty on Chinese imports. 

Despite growing consternation and concern expressed by economists and CEOs, Trump administration officials have been stubborn in defending its trade policies. Treasury Secretary Scott Bessent told CNBC Tuesday that roughly 70 countries want to discuss deals with the White House, while trade advisor Peter Navarro on Friday said tariffs are not negotiable. (Whether discussing deals is a form of negotiation is apparently debatable.) 

But at least one member of the Trump cadre doesn’t seem too happy about the tariffs. Elon Musk, while not addressing the White House’s trade policies specifically, described Navarro — the administration’s top trade advisor — as a “moron” and “dangerously dumb.” Musk is the de facto DOGE leader, a key role in the Trump administration. He is also the CEO of Tesla, a multinational company.

Still, given how staunchly White House officials have been advocating for tariffs, it doesn’t seem likely that Musk’s public feud with Navarro will staunch the wound on global trade.

Tariffs take effect
U.S. President Donald Trump’s latest tariffs, which impose duties ranging from 11% to 84% on 86 countries, are now live. The round of so-called reciprocal tariffs exceeds a base rate of 10% that was imposed on many other countries over the weekend. After China, Lesotho is subject to the biggest single-nation tariff rate in the new round. The African nation’s exports to the U.S. are subject to a 50% duty.

Enormous tariffs on China
China will see net total tariffs of 104% on its exported goods to the United States. They comprise a previously imposed 20% duty, a 34% additional tariff and a last-minute 50% increase that Trump signed late Tuesday. Treasury Secretary Scott Bessent said Tuesday China’s response “was a big mistake.” After the tariffs, Citi on Tuesday lowered its China growth forecast this year to 4.2% from 4.7%. Signs point to Citi being just the first on Wall Street to do so.

Early rally in U.S. markets fizzles out
U.S. stocks fell Tuesday, giving up gains from a rally earlier in the day. The Dow Jones Industrial Average lost 0.84%. The S&P 500 declined 1.57% and the Nasdaq Composite fell 2.15% — the former has lost more than 12% and the latter slumped over 13% in the past four trading sessions. Asia-Pacific markets were in the red Wednesday. Japan’s Nikkei 225 lost around 4%, while South Korea’s Kospi fell more than 1.8% to enter bear market territory.

Microsoft the most valuable company again
Apple’s 5% slump Tuesday puts its combined losses over the past four days at 23%, giving the Cupertino-based company a market capitalization of $2.59 trillion. That means Microsoft, which is worth $2.64 trillion, is again the world’s most valuable public company. Apple is getting hit the hardest among tech’s megacap companies because of its reliance on China — and manufacturing iPhones in the U.S. is not “a thing,” according to an analyst.

Musk notches up attacks on Navarro
Tesla CEO Elon Musk on Tuesday blasted Trump’s top trade advisor Peter Navarro as “truly a moron.” Musk was responding to Navarro’s comment that Tesla is more of a “car assembler” than a car manufacturer. When asked about the feud, White House press secretary Karoline Leavitt said, “Boys will be boys, and we will let their public sparring continue.” Tesla’s stock is down 22% in the past four trading sessions.

Reserve Bank of India cuts rates
India’s central bank expectedly cut its policy rate by 25 basis points to 6%, marking its lowest level since September 2022 as growth concerns mount. India’s economy expanded by a weaker-than-expected 6.2% in the fourth quarter of 2024, and is expected to grow 6.5% in the financial year to March 2025 — a sharp slowdown from 9.2% the year before. Additionally, Trump’s 26% tariff on India has come into effect.

[PRO] Stocks to benefit from trade deals
U.S. Treasury Secretary Scott Bessent said around 70 countries have reached out to the White House to discuss tariff proposals. Some of those countries might come to an agreement first, which could lift the stocks of companies that have close business dealings in those locations.

No deal in sight to stop U.S.-China trade war

“We have stressed more than once that pressuring or threatening China is not a right way to engage with us,” spokesperson for China’s Foreign Ministry Lin Jian said, as per the official English translation of his statement in Mandarin. “China will firmly safeguard its legitimate rights and interests.”

As for negotiations, he deflected the question to “competent authorities.” He added Tuesday that the U.S. doesn’t seem to be serious about having talks right now, given its actions.

But beyond some piecemeal limits on tariffs or Chinese exports, it’s not clear what a U.S.-China deal would look like.