(C) Common Dreams
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Stocks Plunge After Trump's Sweeping Tariff Announcement [1]
['Sonam Sheth', 'David Lubin', 'Bonnie Watson Coleman']
Date: 2025-04-02 17:24:55-04:00
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources.
Stock futures plunged after President Donald Trump announced that his administration will slap sweeping "reciprocal" tariffs on countries across the world.
Why It Matters
Trump campaigned on a pledge to impose steep tariffs on key U.S. trading partners and repeatedly referred to himself as "tariff man" during the 2024 campaign.
The Trump administration has said the tariffs will boost U.S. revenue and expand the American manufacturing sector, though economists warn that American consumers will end up shouldering most of the cost of the tariffs.
Trump's back-and-forth on tariff policy has also led to increased market volatility since he took office, which experts say risks sending the economy into a recession.
What To Know
Trump made his tariff announcement a little after markets closed at 4 p.m. ET, sending stock futures into a tailspin.
As of 8 p.m. ET, the SPDR S&P 500 ETF Trust (SPY), which tracks the S&P 500 index, lost 3.46%. The SPDR Dow Jones Industrial Average ETF Trust (DIA) lost 2.39% and the Invesco QQQ ETF, which tracks the Nasdaq composite index, lost 4.38%.
President Donald Trump holds a signed executive order during an event to announce new tariffs in the Rose Garden of the White House, Wednesday, April 2, 2025, in Washington. President Donald Trump holds a signed executive order during an event to announce new tariffs in the Rose Garden of the White House, Wednesday, April 2, 2025, in Washington. Evan Vucci/AP
The U.S. dollar also fluctuated significantly while Trump was making his announcement, with the dollar index at one point falling more than 0.7 percent for the day. The index measures the value of the U.S. dollar relative to a basket of foreign currencies.
Trump kicked off what he's touted as "liberation day" in a meandering speech from the White House Rose Garden, saying his new tariff policy would unleash an era of American "economic independence."
"Our country and its taxpayers have been ripped off for more than 50 years, but it's not going to happen anymore," Trump said.
He went on to unveil a list of more than 180 countries and territories he said would be hit with tariffs.
The president said there will be a "baseline" tariff of 10% on all imports.
Some nations will face higher "discounted reciprocal tariffs" which he said are at half the rate those countries currently charge the U.S.
Trump did not say how the White House arrived at its calculations, but the administration later clarified in a post that it calculated each country's tariff rate using a formula based on dividing the U.S.'s trade deficit with a foreign country by that country's exports.
The White House halved that number to arrive at Trump's "discounted reciprocal" tariff for each country.
According to a chart Trump held up on Wednesday, the U.S. will impose a 34% tariff on Chinese imports; 20% on goods from the European Union; 25% on South Korean products; 24% on Japanese imports; and 32% on goods from Taiwan.
The chart also included India, Israel, Brazil, Singapore, Thailand, Switzerland, Malaysia, Cambodia and the UK.
In China's case, White House press secretary Karoline Leavitt told CNN the 34% reciprocal tariff that was announced is in addition to a 20% tariff on Chinese goods that is already in effect.
Russia, Canada and Mexico were not on the charts the president held up.
A White House official told NOTUS that Russia was not on the list because the U.S. does not trade with Russia amid its war against Ukraine. The official said Canada and Mexico were omitted because tariffs the U.S. previously imposed on both countries remain in effect.
What People Are Saying
Justin Wolfers, a professor at the University of Michigan, wrote on X, formerly Twitter: "Trump says these tariffs will raise roughly $6 trillion. Assuming that's over a 10-year window, that's $600 billion per year. There are 134 million households, so this is about $5,000 per household per year. And it's like a sales tax, so it's a flat tax. A huge hit to the budgets of working- and middle-class Americans."
Mark Zandi, the chief economist at Moody's Analytics, told Newsweek: "The bulk of tariffs are borne by American consumers in the form of higher prices ... A combination of the tariffs and the retaliation will weigh heavily on the economy and in many scenarios may push us into a recession."
What Happens Next
A 25% tariff on "all foreign-made automobiles" will take effect on April 3. The 10% "baseline" tariffs will take effect on April 5 and the reciprocal tariffs will kick in on April 9.
Update 04/02/25 6:05 p.m. ET: This article has been updated with additional information.
Update 04/02/25 6:53 p.m. ET: This article has been updated with additional information.
Update 04/02/25 8:46 p.m. ET: This article has been updated with additional information.
Update 04/02/25 11:10 p.m. ET: This article has been updated with additional information.
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[1] Url:
https://www.newsweek.com/stocks-tank-trump-tariff-announcement-2054534
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