The United States said on Tuesday that 104% duties on imports from China will take effect shortly after midnight, even as the Trump administration launched talks with allies also targeted by the tariff regime.

U.S. stocks posted a fourth straight day of losses, with the S&P 500 dropping below 5,000 for the first time in nearly a year. The index has now lost 18.9% from its recent peak, nearing the 20% decline that defines a bear market.

According to LSEG data, S&P 500 companies have shed $5.8 trillion in market value since Trump’s tariff announcement last week — the steepest four-day plunge since the benchmark’s creation.

Markets had briefly rallied on hopes of negotiations. Talks are underway with South Korea and Japan, while Italian Prime Minister Giorgia Meloni is due in Washington next week.

“These are tailored, highly tailored deals,” Trump said at a White House event, adding that over 70 countries have expressed interest in talks. Still, the White House confirmed that tariffs of up to 50% would go into effect as scheduled at 12:01 a.m. ET.

China faces the steepest hike, with all its goods now subject to 104% tariffs after retaliatory measures of its own. Trump officials said Beijing is not a priority for talks.

The administration has framed the move as a national economic strategy, with advisor Kevin Hassett saying the focus is now on “allies like Japan and Korea.”

Customised deals could also include considerations like military aid. Press Secretary Karoline Leavitt confirmed “everything’s on the table.”

Lead trade negotiator Jamieson Greer told lawmakers there are no exemptions for now. “We’re trying to move quickly, but there’s no fixed deadline,” he said.

Markets are bracing for a protracted standoff. Citi slashed its 2025 China GDP forecast from 4.7% to 4.2%, citing growing risk.

Canada will implement its own 25% tariffs on certain vehicles after midnight. Prime Minister Mark Carney said Canada is “responding with purpose and force.”

Mexico and Canada remain exempt from this new round but face existing tariffs unless goods fall under the three-way trade agreement.

Three in four Americans expect higher prices, a Reuters/Ipsos poll showed. Retailers are already adjusting. Micron will impose surcharges; clothing companies are delaying hiring. Vietnamese-made shoes priced at $155 will jump to $220 under the new 46% levy.

Consumers like Thomas Jennings are stockpiling goods: “Beans, canned goods, flour — I’m buying double.”

European Commission is weighing 25% countertariffs on U.S. goods, including soybeans and sausages. Von der Leyen is under pressure from pharma executives warning that the tariffs could accelerate the industry’s pivot to the U.S.

Auto and metals tariffs remain in place, and the EU faces an additional 20% tariff on other products. Trump has also threatened new duties on European alcoholic beverages.

Oil prices stabilised after a sharp drop to four-year lows.

The global economy is entering uncharted waters. Whether Trump’s tariffs reshape the global order or plunge markets further remains to be seen.

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