Trump Digs In on China Trade Demands as Tariff Fallout Sends Markets into Turmoil

U.S. stock futures plummeted Sunday evening, with Nasdaq futures sinking over 5% and the Dow Jones Industrial Average futures dropping 4.1%, as President Donald Trump doubled down on his refusal to negotiate trade deals with China until its trade surplus with America is eliminated. The latest market rout compounds losses from Wall Street’s worst week since the pandemic began, erasing over $5 trillion in global market value and pushing the Nasdaq Composite into bear market territory.

“We have a trillion-dollar trade deficit with China,” Trump declared Sunday, defending his aggressive tariff rollout during remarks to reporters aboard Air Force One. “Unless we solve this, I won’t make a deal.” While claiming he doesn’t “want stocks to go down,” he likened the market chaos to necessary “medicine” for fixing trade imbalances.

The hardening stance comes amid escalating global retaliation. China has imposed 34% tariffs on select U.S. goods, while the European Union finalizes countermeasures ahead of Wednesday’s deadline for additional U.S. duties targeting “bad actors”. The administration’s new baseline 10% tariff on most trading partners took effect over the weekend, with Trump praising the policy as “a beautiful thing” generating “tens of billions” for the U.S. treasury.

Trade Deficit at the Core While Trump cited a $1 trillion deficit with China, official 2023 data shows a $279.4 billion goods-and-services gap, down $102.9 billion from 2022. However, 2024’s deficit has widened again, reaching $295.4 billion with China through December as imports surged. The administration appears to conflate cumulative deficits with annual figures, but the broader trend—particularly China’s $427.2 billion in imports versus $147.8 billion in U.S. exports last year—fuels Trump’s grievances.

Market Carnage Unfolds Thursday’s trading saw the Dow plunge 1,700 points, its fifth-worst decline ever, while the Nasdaq cratered 6%. The selloff accelerated over the weekend, with S&P 500 futures down 4% and tech giants like Apple and Nvidia losing $800 billion in combined value last week alone. Even traditionally insulated sectors felt the pain: the Russell 2000 small-cap index sank 6.4%, and 10-year Treasury yields fell 14 basis points as investors fled to safety.

Global Repercussions Mount European and Asian leaders have flooded Trump with calls seeking tariff exemptions, but the president offered no concessions, declaring the U.S. “much stronger” for enduring short-term market pain. Commerce officials confirmed plans to proceed with reciprocal tariffs, while National Economic Council Director Kevin Hassett denied intentionally tanking markets.

What’s Next With China and the EU vowing further retaliation, analysts warn of a full-blown trade war. The White House’s legal challenges have begun, while industries from semiconductors (Nvidia) to footwear (Nike) scramble to mitigate supply-chain disruptions. As Monday’s opening bell looms, investors brace for extended volatility, with Trump’s “medicine” poised to test the limits of market resilience.

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This story synthesizes the latest developments as of April 6, 2025, including real-time market data, official trade figures, and direct quotes from U.S. and international sources.