TLDR

Table of Contents

President Trump announced sweeping global tariffs with a 10% baseline plus additional levies on “bad actors,” setting the highest effective US tariff rate in over 100 years
Markets plummeted worldwide with S&P 500 futures down 3.4%, Dow Jones futures dropping nearly 1,200 points, and Nasdaq futures tumbling 3.9%
China faces a total 54% tariff rate, causing Apple shares to fall over 7% amid supply chain concerns
In total, 185 countries are impacted by the tariffs, which take effect April 5 and April 9
Treasury Secretary Scott Bessent indicated tariffs could be negotiable, calling them “a ceiling, not a floor”

President Donald Trump’s newly announced global tariff plan has sent shockwaves through financial markets worldwide. US stock futures nosedived on Thursday, with the Dow Jones Industrial Average tumbling almost 1,200 points as investors reacted to the unexpectedly steep tariffs.

The plan, dubbed “Liberation Day” tariffs, follows a two-step approach. It imposes a baseline rate of 10% on all US trading partners. It then applies extra duties to countries considered “bad actors” on trade.

Impact on Major Indices

Contracts on the tech-heavy Nasdaq 100 led the sell-off, plummeting 3.9% as losses accelerated before the opening bell. S&P 500 futures dived 3.4%. Dow Jones Industrial Average futures tumbled 2.9%, representing over 1,000 points.

The market reaction came after all three major indexes had closed higher on Wednesday. Investors had hoped the Rose Garden announcement would be less severe than feared. Those hopes were dashed by the scope of the actual announcement.

Global markets also felt the impact. The pan-European benchmark Stoxx 600 sank over 2%. Japan’s Nikkei 225 slumped 2.7% to its lowest level since August.

Country-Specific Tariffs

China was hit with additional US tariffs that raised its overall rate to 54%. This sparked concerns about supply chain disruptions for companies like Apple, whose shares fell over 7%. Nvidia and other chip stocks also tumbled due to similar worries.

The European Union faces an additional 20% tariff rate. Japan will see an extra 24% on its goods. Some Asian countries face even steeper levies, with Vietnam getting 46% and Cambodia 49%.

Canada and Mexico were exempt from fresh tariffs as they are already subject to levies. In total, some 185 countries are impacted by the new tariffs.

The levies go into effect in two phases. The first phase begins April 5. The second phase starts April 9.

Economic Concerns

Economists warn that the tariffs could have far-reaching effects. Deutsche Bank strategist Jim Reid noted, “The tariffs put in place last night were extraordinary both in terms of scale and in how they were calculated.”

Deutsche Bank economists estimate that the average tariff rate on US imports could rise into the 25%-30% range. This level was “clearly on the worst end of expectations,” according to Reid.

The move sets the effective US tariff rate at its highest level in over 100 years. This has increased fears of a full-on trade war and a severe hit to global growth.

Daniel Murray, head of research at private banking group EFG, stated that “the risk of a US and global recession has increased, as has the likelihood that inflation stays higher for longer.”

Retailers like Walmart, Target, and Nike saw their shares fall. Investors are concerned about risks to their supply from Asian manufacturing hubs.

One potential bright spot exists in the timing. The reciprocal tariffs won’t go into effect until Wednesday, April 9. This gives countries some time—albeit not much—to negotiate with the Trump administration.

Treasury Secretary Scott Bessent indicated there might be room for compromise. He stated that the tariffs will be “a ceiling, not a floor,” according to The Wall Street Journal. However, he also urged countries not to retaliate.

As Hargreaves Lansdown analyst Matt Britzman put it: “A carrot has been dangled, but if countries opt for the stick, retaliation could mean things get worse before they get better.”

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