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U.S. Stocks Tumble Over Concerns of Trump's New Tariffs
Trump's sweeping tariff announcement triggered a sharp drop in the stock market amid concerns of a global trade war and the increased chances of a recession.
Eric Moody
April 04, 2025
What Happened?
President Donald Trump's sweeping tariff announcement, aimed at boosting U.S. manufacturing, triggered a sharp drop in stocks amid concerns of a global trade war.
Within minutes of the opening bell on Thursday, The Dow Jones tumbled over 1,500 points, the S&P 500 sank over 4%. The Nasdaq index dropped nearly 5%.
Retail stocks were reportedly among the hardest hit as manufacturing and exporting nations such as China could reach tariffs as high as 54%.
The Trump administration's plan, unveiled on what he named 'Liberation Day,' outlines a baseline tariff of 10% on all goods coming into the U.S.
It reportedly marks the biggest upheaval of global trade norms since World War II, taking a maximum rate of more than 50% on imports from some countries.
The 10% universal tariff will go into effect on April 5, while the reciprocal measures for specific countries will begin on April 9.
Trump has also imposed a 20% tariff on goods from the European Union.
Mexico and Canada were excluded from Wednesday’s actions but are still subject to 25% tariffs as negotiations continue.
White House Press Secretary Karoline Leavitt told reporters Tuesday that Trump’s promised tariffs will be 'effective immediately.'
Why it Matters
According to reports, economists warn the new taxes will result in higher prices and slower growth in the U.S.
Other countries will likely be pushed into recession as a result.
Trump states these levies aim to 'rectify trade practices that contribute to large and persistent annual United States goods trade deficits.'
But the flashing-red warning sign from Wall Street is what experts are projecting as potential economic fallout.
Import tariffs of 25% on cars and car parts have caused manufacturers like Stellantis to implement sudden layoffs.
Stellantis temporarily laid off 900 workers at five U.S. facilities, according to reports.
Some assembly plant production in Mexico and Canada was also temporarily paused.
Trump called on lawmakers to keep Canada tariffs in place amid a flow of fentanyl and undocumented migration he also pointed toward Mexico and China.
Despite much friction, Trump believes these tariff measures are the first steps to bringing more production and jobs to the U.S.
How it Affects You
Most experts are concerned about the impact tariffs will have on inflation and consumer costs down the line.
Addressing the trade imbalances that Trump has pointed out would require labor-intensive, low-wage work to now be performed in the U.S.
A reversal of being performed in nations like Vietnam or Cambodia would likely impact the spending power of the average American worker.
It is also potentially damaging to key ally trade relationships despite Trump viewing these measures as 'fair.'