Trump’s steepest tariffs fall on China, one of the U.S.’s largest trading partners. Tariff rates on China now total at least 104%: 20% tariffs related to fentanyl, 34% “reciprocal tariffs,” and then a quickly imposed 50% tariff in response to China’s retaliatory measures.

The steep tariffs will hit China’s exports to the U.S., which will hurt the country’s economic growth. On Tuesday, Citi cut its GDP growth forecast to 4.2%, down from 4.7%.

China will impose a flat 34% tariff on all U.S. imports on April 10, as part of a broader set of retaliatory measures against Trump’s tariffs. Chinese officials have held firm, pledging to “fight to the end” against Trump’s tariffs. 

The U.S. president has flip-flopped on his openness to a deal with China. In his social media post announcing a new 50% tariff on Chinese goods, Trump stated that all negotiations with China were off. Yet late on Tuesday, he affirmed that “China also wants to make a deal, badly, but they don’t know how to get it started. We are waiting for their call!”

Still, Chinese markets performed well on Wednesday. The CSI 300, which covers companies trading in Shanghai and Shenzhen, rose by 1.0%, as Chinese officials promised measures to bolster the stock market, deploying the “national team”—a nickname for sovereign wealth fund Central Huijin Investment—to the Chinese ETF market. Regulators are also encouraging state-owned companies to start share buybacks.

Hong Kong’s benchmark Hang Seng Index rose around 0.7%, adding to a slight recovery following the market’s massive stock drop, the worst since 1997, on Monday.

Japan and South Korea, which got tariffs of 24% and 25% respectively, failed to win exemptions in time, despite both major economies being prioritized by the White House for tariff negotiations. 

Japan’s benchmark Nikkei 225 index sunk by 3.9%, while South Korea’s KOSPI dropped by 1.7%. 

Trump officials have signaled some optimism that trade negotiations with Japan and South Korea will continue. “Things are looking good,” Trump wrote on social media, following a call with Korea’s acting president, Han Duck-soo. 

Seoul is preparing to support its auto industry, already reeling from 25% U.S. tariffs on imported cars. The government has promised $10.2 billion in support for the industry, and will encourage greater exports to the “Global South,” or markets in Africa, Latin America, and Asia. 

Taiwan’s Taiex index dropped by 5.8% on Wednesday, the third straight day of sharp declines after Trump announced 32% tariffs against the island. Shares in Apple supplier Foxconn dropped by 10%, the daily limit, for the third time this week. (Foxconn relies heavily on Chinese factories, like its “iPhone City” complex in Zhengzhou.)

The island has offered to cut its tariffs to zero and boost investment in the U.S.; it’s also promised not to retaliate. On Tuesday, the island’s government promised to tap into its $15 billion stock stabilization fund to restore investor confidence. 

Southeast Asia

High U.S. tariffs on Southeast Asian countries also went into effect on Wednesday. Trump reserved some of his highest tax rates for the region, with Vietnam, Cambodia, Laos, and Myanmar all getting tariffs upwards of 40%. 

Southeast Asian economies, particularly Vietnam, have benefited from “China plus one” approaches to supply-chain diversification. But that’s now threatened by “Liberation Day” tariffs. GDP growth in Vietnam, which relies on U.S. exports for 30% of its economy, might drop by a full 1.5 percentage points, Goldman Sachs estimated last week.

Vietnam has offered to cut its own tariffs on U.S. imports, but Trump officials like trade advisor Peter Navarro have already rejected the offer, as it won’t address the underlying trade deficit. Economists argue that countries like Vietnam and Cambodia are just not sufficiently wealthy to buy enough U.S. goods to completely rebalance trade.

Leaders across Southeast Asia are now speaking out against Trump’s tariffs. Singapore Prime Minister Lawrence Wong on Tuesday blasted the tariffs as “not actions one does to a friend,” and reaffirmed its status as a free trading hub. Earlier this week, Malaysia Prime Minister Anwar Ibrahim said he will “lead efforts to present a united regional front” among the Association of Southeast Asian Nations.