The U.S. stock market closed on Wednesday (23) with low fluctuations, as investors assess the recent escalation in trade tensions between the U.S. and China, as well as the economic policies of President Donald Trump. The Dow Jones Industrial Average closed at 39,857.50, the S&P 500 at 5,363.01 and the Nasdaq Composite at 16,790.88, reflecting a market marked by uncertainty and volatility.

Intensification of Trade Tension

Trade tensions between the world's two largest economies have escalated in recent weeks, with the United States taking strong measures to protect its economic and strategic interests. On April 21, 2025, the United States imposed tariffs on imports of Chinese-made solar cells from Southeast Asia, with rates ranging from 14.64% to 3,403.96%, as reported by Reuters news agency.

Additionally, on April 17, the US Federal Government Agency reported the imposition of tariffs on Chinese vessels calling at US ports, with Phase 1 rates ranging from $50 to $140 per net ton for ship owners and $18 to $33 per net ton for Chinese-built vessels.

In response to the US actions, China raised its tariffs on American goods to 125% on April 11, 2025, as reported by Xinhua News Agency. In this regard, the Chinese Ministry of Commerce included 12 American companies on its export control list and six on the list of untrustworthy entities, restricting their activities in Chinese territory.

President Trump has warned that additional tariffs could be imposed if Beijing insists on maintaining higher tariffs than those imposed by the United States. The White House stressed the importance of a balanced dialogue, but reaffirmed the US commitment to defending its economic interests and ensuring fairer trade conditions.

In addition, a temporary tariff exemption was granted for some Chinese electronic products, such as computers, smartphones and semiconductors. This strategic measure aims to ensure the competitiveness of American companies while investigations related to national security tariffs are ongoing.

Stock Market Reaction

Despite the uncertainties generated by the trade dispute scenario, markets registered low variations. Yahoo Finance reported that the Dow Jones Industrial Average closed at 39,857.50, slightly higher than the previous day's value, although below the intraday peak of 39,747.68. The S&P 500 closed at 5,363.01, a slight decline in relation to the day's high of 5,385.60, while the Nasdaq Composite reached 16,790.88, surpassing its intraday mark of 16,748.67.

American companies have shown resilience in the face of challenging conditions. Tesla, for example, saw its shares rise nearly 8% after reporting better-than-expected earnings in the auto sector. Elon Musk, the company’s CEO, also said he would focus more on his private initiatives than on political involvement, a decision that pleased investors. Similarly, Boeing shares rose 5.9% after reporting a smaller-than-expected quarterly loss.

Broader Economic Context

President Trump’s trade policies have had a significant impact on the global economy, reaffirming the United States’ role as a global economic leader. Al Jazeera reported that Beijing has threatened other countries to avoid trade deals that favor the United States, highlighting the power of Chinese policies in shaping the international landscape.

Despite the pressure, China's economy grew in March 2025, with exports above forecasts. However, Reuters noted that the real estate sector remains a drag, with investment falling 9.9% during the first quarter.

In the United States, the financial market remains focused on new announcements from Washington and Beijing, as tariffs and retaliatory measures continue to directly impact corporate profits and consumption patterns. In addition, the appointment of Li Chenggang as China's new trade negotiator indicates the search for a stronger strategic position in bilateral discussions.

#TrumpVsPowell #USChinaTensions #DowJones

Fontes: Reuters, Yahoo Finance, News.cn, Mofcom, Al Jazeera, White House, USTR