Threat Looms Large Over Indian Stock Market? China’s Warning of Countermeasures After Trump’s Tariffs Raises Concern

China Tariff on US: The India stock market has been experiencing repeated red candles over the past five months. Prices have been creating lower lows, increasing tension among traders. While some experts attribute the fall in major indices like Sensex and Nifty 50 to market correction, others believe that midcap stocks were overvalued. However, a significant factor impacting the market is Donald Trump’s policies on international trade and the imposition of tariffs.
Now, China, the second-largest economy in the world, has vowed to retaliate against new US tariffs, further escalating trade tensions. This has raised concerns among Indian retail investors, many of whom are witnessing their portfolios in red. With the possibility of China imposing tariffs on the US, uncertainty looms over the India stock market.
China Slams US Tariffs, Vows Countermeasures
China has strongly opposed the US decision to impose new tariffs, calling it an unfair move linked to the fentanyl issue. The Chinese commerce ministry stated on Tuesday that it would implement countermeasures to protect its rights and interests.
The US has accused China of supplying chemicals used in fentanyl production, but China has denied any wrongdoing. Beijing believes that Washington is using this issue as a pretext for imposing trade restrictions.
Donald Trump Imposes 10% Additional Tariff on Chinese Goods
Donald Trump recently announced a 10% additional tariff on Chinese goods, raising the total tariff to 20%. The tariffs are set to take effect this week, further straining US-China trade relations. In response, China’s foreign ministry has condemned the move, accusing the US of using “tariff pressure and blackmail.”
Economic experts warn that these tariffs could have severe global consequences, leading to disruptions in supply chains and increasing consumer prices.
How China Tariff on US Could Impact India Stock Market
With both global giants standing firm, the India stock market finds itself in a dilemma. Investors fear a potential ripple effect, where rising US-China tensions could lead to capital outflows, increased volatility, and pressure on the Indian rupee.
Even Union Minister Piyush Goyal has commented that the India stock market may witness a slight correction. As of March 4, 2025, the Nifty 50 is trading at 22,068, down 0.22% as of 12:35 PM and Sensex is at 72,926, down 0.20% as of 12:35 PM.
The India stock market has shown resilience in the past, but traders and investors remain cautious amid rising tensions. If China’s tariff on the US leads to a prolonged trade war, Indian stock market could also be affected, further impacting market sentiment.