April 3, 2025 — In an unexpected turn of events, President Donald Trump delivered a sweeping tariff plan.
Allegedly, authorizing a 10% baseline tariff on all imports and higher “reciprocal tariffs” targeting specific countries.
Subsequently, with the administration marking the announcement as “Liberation Day,” major stock indices plummeted.
Consequently, markets reacted to fears of a global recession.
Details of the Tariff Announcement
Included in President Trump’s tariff plan is a 10% baseline tariff on all imports and higher “reciprocal tariffs”.
Allegedly, it is directed toward certain nations:
China: a 34% tariff, bringing the total tariff to 54% with the current tariffs.
European Union (EU): a 20% tariff.
All Other Developing Countries: other countries such as Cambodia and Myanmar will receive tariffs of 49% and 44%, respectively.
Evidently, the administration is claiming that these tariffs are designed to bring back manufacturing jobs. Furthermore, repair the trade deficit.
President Trump stated that “jobs and factories will be coming roaring back into our country… this will be, indeed, the golden age of America.”
Immediate Market Reactions
As one might expect, the markets reacted quickly and negatively to the tariffs:
Dow Jones Industrial Average: dropped in the futures market over 1,000 points representing a -2.7% drop at the start of market hours.
S&P 500: futures had a -3.26% decline.
Nasdaq Composite: dropped -4.6% in the futures market.
Investors appear to be bracing for heightened volatility.
Global Market Reactions
The effects of the U.S. tariffs are being manifested in foreign markets:
The Guardian European: Germany’s DAX fell 2.5%, France’s CAC 40 fell 2.3%, and the U.K.’s FTSE 100 fell 2.1%.
Asian: Japan’s Nikkei fell 2.8% and Hong Kong’s Hang Seng fell 1.5%.
Stock Reactions in Certain Sectors
Evidently, there are some sectors and companies exposed internationally, which exhibited a material impact.
Technology: The stock of Apple fell 7% because of Apple’s exposure to Chinese manufacturing.
Retailers: In response, Nike lost 9.1% and Walmart lost 5.8%.
Banking: Bank stocks, like JPMorgan, Citigroup, and Bank of America were down +3%.
Government and expert comments
Allegedly, Treasury Secretary Scott Bessent attempted to justify the market’s negative reaction.
Subsequently, by saying he does not make decisions based upon the after-market trades.
Furthermore, he concluded by stating he assumes tariffs have reached a potential maximum unless retaliation is implemented.
Aside from that, economists are concerned about the risk of stagflation, (slow economic growth coincident with inflation).
Daniel Morris of BNP Paribas said that regarding the tariffs, the severity was more than any of the investor community was expecting.
Consequently, he raised an important question on what future negotiations, if any, had been planned to conclude the escalation of trade issues.
