Trump's 104% tariffs on China to take effect at midnight, quashing earlier market gains

The United States said on Tuesday that 104 per cent duties on imports from China will take effect shortly after midnight, even as the Trump administration moved to quickly start talks with other trading partners targeted by U.S. President Donald Trump's sweeping tariff plan.

U.S. stocks dropped on Tuesday for a fourth straight trading day since Trump's tariffs announcement last week, with the S&P 500 closing below 5,000 for the first time in almost a year. The index is now 18.9 per cent below its most recent high on Feb. 19, close to the 20 per cent decline that defines a bear market.

S&P 500 companies have lost $5.8 trillion US in stock market value since Trump's tariff announcement last Wednesday, the deepest four-day loss since the benchmark was created in the 1950s, according to LSEG data.

Global markets had previously posted gains on hopes that Trump might be willing to negotiate down the array of country- and product-specific trade barriers he is erecting around the world's largest consumer market.

Japan's Nikkei saw a broad sell-off on Wednesday morning and other Asian markets were braced for falls, hours before the tariffs were set to take effect.

The administration has scheduled talks with South Korea and Japan, two close allies and major trading partners, and Italian Prime Minister Giorgia Meloni is due to visit next week.

"These are tailored, highly tailored deals," Trump said at a White House event, where he signed executive orders aimed at boosting coal production. "We've had talks with many, many countries, over 70, they all want to come in. Our problem is, can't see that many that fast."

But the White House made clear that country-specific tariffs of up to 50 per cent would nevertheless take effect at 12:01 a.m. ET, as planned.

Those tariffs will be especially steep for China, as Trump has ratcheted up duties on its imports to 104 per cent in response to counter-tariffs Beijing announced last week. China has refused to bow to what it called "blackmail" and has vowed to "fight to the end."

Administration officials said they would not prioritize negotiations with the world's No. 2 economic power.

The U.S. will itself face new tariffs at 12:01 a.m. ET on Wednesday — from Canada — of 25 per cent, on fully-assembled vehicles that aren't compliant with the Canada-U.S.-Mexico Agreement (CUSMA), when imported into Canada from the U.S. 

Fully assembled vehicles that are CUSMA-compliant will also be hit with 25 per cent tariffs on their non-Canadian and non-Mexican content, when brought into Canada from the U.S.

Prime Minister Mark Carney had telegraphed that Canada would bring these countermeasures forward, and Canada's finance minister confirmed Tuesday that these were moving ahead.

"Canada continues to respond forcefully to all unwarranted and unreasonable tariffs imposed by the U.S. on Canadian products," Finance Minister François-Philippe Champagne said in a statement.