Stocks dropped sharply on Thursday morning after President Donald Trump announced new tariffs affecting nearly all of America’s major trading partners. The S&P 500 index fell by 4%, marking its worst day since September 2022. The Dow Jones Industrial Average also experienced a significant decline of 4%, while the Nasdaq Composite dropped even more, falling by 5%. Major companies like Amazon and Apple saw their shares tumble over 8%, and Tesla’s stock fell by 7%.
The impact of Trump’s tariff announcement was felt worldwide. In Europe, the STOXX 600 index and Germany’s DAX index both fell by more than 2%. Japan’s Nikkei 225 also took a hit, dropping nearly 3%.
The tariffs, referred to by the White House as “reciprocal tariffs,” were announced on Wednesday. Trump stated that the trading relationship between the U.S. and its partners had become unbalanced, and he aimed to rectify this with steep taxes on imports. In a post on Truth Social, Trump expressed optimism about the future, saying, “THE OPERATION IS OVER! THE PATIENT LIVED, AND IS HEALING.”
Howard Lutnick, Trump’s Secretary of Commerce, appeared on CNBC, encouraging Americans to remain patient. He predicted that U.S. markets would thrive in the medium to long term due to the tariffs. Lutnick suggested that other countries would begin reassessing their trade policies with the U.S. as a result of these measures.
However, the response from the countries affected has been swift. Nations like China and those in the European Union have expressed their displeasure and are considering retaliatory tariffs on U.S. exports. Treasury Secretary Scott Bessent warned these countries against taking retaliatory actions, suggesting they should wait and see how the situation unfolds. He cautioned that retaliation could lead to further escalations.
As the markets react to these developments, the long-term effects of Trump’s tariffs remain uncertain. Investors and analysts will be watching closely to see how both domestic and international markets respond in the coming days.
