US stock sell-off resumes as investors digest Trump’s China tariffs

Good morning and welcome back to FirstFT Asia, where we’re covering another day of market volatility as investors digested Donald Trump’s tariffs on China. Also in today’s newsletter:

• Xi Jinping removes the PLA’s number-two general

• Creditors sue Byju’s founders over missing $533mn

• How Pokémon cards came to fetch millions

A brutal sell-off on Wall Street resumed yesterday as banks and investors warned that Donald Trump’s tariffs on Chinese imports could tip the US into recession.

Market turbulence: The S&P 500 dropped 3.5 per cent in a sharp turnaround from the previous session’s 9.5 per cent surge after Trump paused the steep “reciprocal” tariffs on most countries. Wall Street’s benchmark share index is down 6.1 per cent for April. The tech-heavy Nasdaq Composite dropped 4.3 per cent after its best day since 2001. In currency markets, an index of the dollar against half a dozen peers tumbled 1.9 per cent, as the rush from US assets sent the Japanese yen, euro and UK pound rallying.

What Wall Street is saying: Banks and investors said Trump’s decision to hoist duties on Chinese imports as high as 145 per cent and keep in place a 10 per cent universal tariff presented a serious risk for the American economy. “Combined with the ongoing policy chaos on trade and domestic fiscal matters, along with the still-large losses in equity markets and hit to confidence, it remains difficult to see the US avoiding recession,” US bank JPMorgan said in a note to clients.

Currency clash fears: The Chinese renminbi weakened to its lowest level since 2007 in the latest sign Beijing is willing to tolerate gradual depreciation in response to US tariffs. The People’s Bank of China has for six consecutive sessions allowed a weakening in the official “fixing” rate for the onshore currency. The move comes after US Treasury secretary Scott Bessent on Wednesday urged China not to further devalue its currency and called a weaker renminbi “a tax on the rest of the world”.

Economic divorce: In response to Trump’s tariffs, Chinese sellers on ecommerce platforms are raising prices by up to 70 per cent for US consumers, while others are preparing to exit the US market, according to one of China’s biggest ecommerce associations. “Chinese sellers will not be able to take on the extra [financial] burden from the US tariff hikes,” said Wang Xin, president of the Shenzhen Cross-Border E-Commerce Association, an industry group which represents more than 2,000 sellers in China.

• China mobilises the ‘national team’: As the Chinese stock market reeled this week from Trump’s “liberation day” tariffs, Beijing launched a co-ordinated government effort to support share prices.

• Uniqlo: The billionaire founder of the Japanese clothing retailer said Trump’s tariffs would do little to halt a shift of supply chains from China to south-east Asia and Africa.

• Opinion: The shock of Trump’s tariffs is pulling Beijing back to economic fundamentals, writes Keyu Jin.

Here’s what else we’re keeping tabs on today and over the weekend:

• Economic data: Malaysia reports February labour force, industrial production and manufacturing sales figures.

• Japan: The Osaka Expo 2025 begins on Sunday, running until October. The event is a “masterclass in smiling through Trump’s tariff calamity”, our Tokyo bureau chief Leo Lewis writes.

• Spanish PM visits China: Pedro Sánchez visits Beijing, where he will meet Xi Jinping. The meeting comes days after Scott Bessent, the US Treasury secretary, warned Spain that aligning more closely with China “would be cutting your own throat”.

How well did you keep up with the news this week? Take our quiz.

Five more top stories

1. President Xi Jinping has purged He Weidong, the number-two general in the People’s Liberation Army and a member of the Communist party’s Politburo. He Weidong’s dismissal is the most dramatic act of Xi’s military anti-corruption campaign and the first firing of a general in that role in six decades.

• UK-China ties: The head of the British military has visited Beijing for the first time in a decade, in a visit announced only by the Chinese government.

2. Creditors of fallen edtech company Byju’s have sued its co-founders and strategy chief for allegedly “masterminding the theft of more than half a billion dollars”. Byju’s was once India’s most valuable start-up and its backers included asset manager BlackRock, investment group Prosus and Meta chief Mark Zuckerberg. Read more on the US legal action.

3. The EU is prepared to deploy its most powerful trade measures and may impose levies on US digital companies if negotiations with Trump fail to end his tariff war against Europe. European Commission president Ursula von der Leyen told the FT that the EU would seek a “completely balanced” agreement with Washington during Trump’s 90-day pause in applying additional tariffs. Read the full interview.

4. BlackRock has subscribed to a $750mn bond issue by India’s Adani Group, a private placement deal that signals a turnaround in the conglomerate’s fortunes even as its billionaire founder remains mired in US legal troubles. About a half-dozen US and European investors participated in the sale and bought about a third of the debt, said a person familiar with the matter.

5. Bridget Brink, the US ambassador to Ukraine, is stepping down following increasing policy disagreements with Trump’s administration, according to people familiar with her decision. Her departure also comes amid a deterioration in her working relationship with Ukrainian President Volodymyr Zelenskyy, although this was not the reason for her relinquishing the role, the people said.

Explainer

After a dizzying few days of trade policy announcements from the White House, FT reporters take you through where things currently stand.

We’re also reading . . . 

• Asia-Pacific start-ups: The region’s fastest-growing companies have adapted quickly to an era of great global economic uncertainty.

• A new who’s who of global elites: They dominate the countries that account for more than half of global GDP — but who are they?

• Russia’s asset grab: Vladimir Putin has been on a nationalisation spree even as he makes overtures to western companies.

Chart of the day

Arctic sea ice hit a record low for the end of the region’s winter last month, as melting opens up the North Pole to increased military and energy exploration by Russia and other countries.

Take a break from the news

As Pokémon approaches its 30th birthday, HTSI’s Victoria Woodcock tells how the trading cards came to fetch millions.