China’s stock market experienced its most severe single-day crash since the 2008 financial crisis on Monday, April 7, 2025, as the Shanghai Composite Index plunged 7.3% to 3,096.58 and Hong Kong’s Hang Seng nosedived 13.5% to 19,770.51.

The collapse, wiping out trillions in market value, was triggered by escalating trade tensions following U.S. President Donald Trump’s imposition of a 34% tariff on Chinese goods, part of his “Liberation Day” policy announced last week. China’s retaliatory 34% tariff on U.S. imports, effective April 10, intensified the panic.

The sell-off saw over 2,000 companies hit the 10% daily limit, halting trading, while the CSI 1000 futures index, tracking smaller firms, also dropped 10%. Beijing’s state interventions pared some losses, but investor confidence remains shattered.

“This feels like 2008 all over again,” said a market analyst on X, reflecting the day’s chaos. The People’s Daily struck a defiant tone, claiming “the sky won’t fall,” yet global markets shuddered—Japan’s Nikkei fell 7.8%, and U.S. futures signaled further declines.

The crash compounds China’s economic woes, already strained by prior tariffs and a slowing recovery. With rare earth export controls and a WTO lawsuit in play, Beijing faces a delicate balancing act.

As ripple effects loom, from tech giants like Alibaba (-9.9%) to global supply chains, this tariff-fueled plunge marks a grim milestone, raising fears of a deeper economic showdown between the world’s top economies.