The CAC 40 in Paris jumped 1.9% to 8,197.43, while Britain’s FTSE 100 advanced 0.7% to 8,819.57.
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China announced it intends to keep its economy growing at around a 5% annual pace in 2025, in line with last year’s target, as it opened the annual session of its largely ceremonial legislature. Premier Li Qiang also promised more government spending and other measures to support growth.
Hong Kong’s Hang Seng index jumped 2.8% to 23,594.21, while the Shanghai Composite index climbed 0.6% to 3,341.96.
Some Chinese commentators noted that Beijing had been bracing for tariffs of up to 60%. As of Tuesday, Trump has pushed import duties on Chinese products to 20%.
Tokyo’s Nikkei 225 index edged 0.2% higher to 37,418.24. In South Korea, the Kospi gained 1.2% to 2,558.13, while Australia’s S&P/ASX 200 shed 1.2% to 8,141.10.
On Tuesday, U.S. stocks racked up more losses on Wall Street as the trade war between the U.S. and its key trading partners escalated.
The Trump administration imposed 25% tariffs on imports from Canada and Mexico starting Tuesday as well as doubling tariffs for Chinese exports. All three countries have announced retaliatory actions, sparking worries about a slowdown in the global economy.
“The global trade outlook for 2025 is marked by solid growth amid significant challenges, many of which can be traced back to the policies proposed by U.S. President Trump,” economists at ING said in a report.
But global trade is diverse, with the United States accounting for just 13.6% of total global exports and a similar share of global imports. China’s exports to the rest of Asia have been surging and that can help offset reduced trade with the United States, they noted.
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On Tuesday, the S&P 500 fell 1.2%, with more than 80% of the stocks in the benchmark index closing lower. The Dow slid 1.6% and the Nasdaq composite slipped 0.4%.
The market could soon face more twists in the tariff drama. After Tuesday’s closing bell, Commerce Secretary Howard Lutnick told Fox Business News that the U.S. would likely meet Canada and Mexico “in the middle” on tariffs, with an announcement coming as soon as Wednesday.
The market rally after Trump’s election in November had been built largely on hopes for policies that would strengthen the U.S. economy and businesses. Worries about tariffs raising consumer prices and reigniting inflation have been weighing on both the economy and Wall Street.
They’re also prompting warnings from retailers, given signs that U.S. households are becoming more pessimistic about inflation and pulling back on spending. Consumer spending has essentially driven U.S. economic growth in the face of high interest rates.
Retaliations against the higher tariffs were swift.
China responded to new U.S. tariffs by announcing it will impose additional tariffs of up to 15% on imports of key U.S. farm products, including chicken, pork, soy and beef, and expanded controls on doing business with key U.S. companies. Canada plans on slapping tariffs on more than $100 billion of American goods over the course of 21 days. Mexico also plans tariffs on goods imported from the U.S.
In other dealings early Wednesday, U.S. benchmark crude oil lost 40 cents to $67.86 per barrel, while Brent crude, the international standard, fell 12 cents to $70.92 per barrel.
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The U.S. dollar fell to 149.35 Japanese yen from 149.82 yen. The euro rose to $1.0715 from $1.0626.
Bitcoin was trading at about $88,700 according to CoinDesk.