US stock futures slipped lower Tuesday after President Donald Trump’s 10% trade tariffs against China took effect, while Beijing announced a slew of retaliatory measures.
At 05:20 ET (10:20 GMT), Dow Jones Futures fell 90 points, or 0.2%, S&P 500 Futures dropped 8 points, or 0.1%, and Nasdaq 100 Futures slipped 8 points, or 0.1%.
The main Wall Street indices closed lower Monday, but were off their lows after President Donald Trump postponed a proposed 25% import duty on Canada and Mexico by 30 days.
Beijing retaliates against Trump tariffs
However, he offered no such forgiveness for Beijing, with his 10% tariffs on goods from China taking effect earlier Tuesday.
Beijing retaliated, slapping a 15% tariff on coal and liquified natural gas imports from the U.S., and an additional 10% duty on crude oil, agricultural equipment and automobiles from Feb. 10.
China’s commerce ministry also placed export controls on rare earths and exotic materials, of which the country is a top producer. The materials covered included tungsten, tellurium, ruthhenium, and molybdenum.
Separately, Beijing added Calvin Klein-owner PVH Corp (NYSE:PVH) and biotechnology firm Illumina (NASDAQ:ILMN) to its list of unreliable entities, and initiated an antitrust investigation into Alphabet-owned Alphabet (NASDAQ:GOOG).
The retaliatory measures pointed to the start of a renewed trade war between the world’s biggest economies, with investors now bracing for further escalation, given Trump’s hawkish stance against Beijing.
China accounts for substantial portion of US imports, with any retaliation from Beijing likely to further destabilize global trade. China is the US's third-biggest trading partner behind Mexico and Canada.
Alphabet set to report
There are a large number of important companies set to report this week, with the likes of Merck (NYSE:MRK) and PepsiCo (NASDAQ:PEP) set to offer up their numbers during this session.
However, the main focus will be on Google-parent Alphabet (NASDAQ:GOOG), which is due to report its latest quarterly returns after the closing bell.
Analysts will be paying close attention to the search giant's plans for spending on artificial intelligence, particularly after the emergence of an AI model from Chinese start-up DeepSeek last week.
Crude falls on global output fears
Oil prices fell sharply Tuesday as traders gauged the potential for severe disruption to global economic activity due to the tit-for-tat tariffs between the US and China.
By 05:20 ET, the US crude futures (WTI) slipped 1.9% to $71.80 a barrel, while the Brent contract fell 1.2% to $75.07 a barrel.
Despite the tariff announcements, the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, maintained their current oil production plans, resisting calls from Trump to lower prices.
This decision underscores the group's commitment to a gradual phase-out of production cuts, set to begin on April 1, contingent on low inventories and rising global demand.
The OPEC+ cartel has been cutting output by 5.85 million barrels per day, equal to about 5.7% of global supply, as agreed in a series of steps since 2022.
