Trump’s Surprise Tariff Announcement Sparks Panic in Markets
On Wednesday, US President Donald Trump introduced a sweeping set of trade tariffs that stunned global markets. The new policy, aimed at countering what he called “unfair trade practices and currency manipulation,” led to a sharp selloff in US stock index futures and rattled major economies across the globe.
The President imposed a 10% base tariff on all imports starting April 5, 2025, while countries categorized as “bad actors” will face additional tariffs ranging from 20% to 49%, beginning April 9.
US Stock Futures Dive Deep
Following the announcement, US stock index futures nosedived:
Dow Jones Futures fell by 1,150 points or 2.9%
S&P 500 Futures dropped 180 points, losing 3.3%
Nasdaq 100 Futures declined 720 points, down by 3.7%
The aggressive move raised concerns of a full-blown trade war that could trigger a global recession.
Countries Hit Hardest by Tariffs
While Canada and Mexico received exemptions from the base 10% tariff, they were still hit with 25% tariffs on most goods. Meanwhile:
China will face an additional 34% tariff on top of the existing 20% duties.
The European Union, Japan, and other major trade partners will see tariffs up to 49% on their exports to the US.
A 25% tariff on foreign-made cars and auto parts will take effect from April 3, 2025, affecting countries like Germany, Japan, and South Korea.
Trump defended the move as a way to protect American manufacturing, stating it would “revive US industries and reduce the national debt.”
Economic Shock: Recession Warnings from Experts
Economists have raised red flags over the potential impact of these tariffs. Carl Weinberg, Chief Economist at High Frequency Economics, warned that US GDP could shrink by 10% in Q2 2025, following a slight contraction in Q1.
He estimated that the tariffs could wipe out $741 billion from either US household real incomes or corporate profits. If the effects of aluminum, steel, and other non-exempt imports are included, the economic impact could be even higher.
Major US Companies Suffer in Premarket
The tariff shock deeply affected many large US corporations, especially those reliant on global supply chains. Among the worst-hit:
Apple Inc. fell by more than 7%, with much of its manufacturing based in China.
Retail giants like Five Below (FIVE), Dollar Tree (DLTR), and Gap (GAP) saw double-digit percentage losses.
Nike (NKE) and Walmart (WMT) slipped significantly due to tariffs on imports from Vietnam, Indonesia, and China.
Nvidia (NVDA) and Tesla (TSLA) also fell roughly 4% as investor sentiment turned risk-averse.
Tesla’s losses came despite a previous rally, triggered by reports that CEO Elon Musk might step down from his government advisory role to fully focus on the company.
Global Markets Mirror US Selloff
Europe Takes a Hit
European stock indices followed the US markets in a downward spiral:
Germany’s DAX dropped 2.6%
France’s CAC 40 fell nearly 3%
UK’s FTSE 100 declined 1.45%
The European Union now faces a 20% reciprocal tariff on its exports to the US, worsening trade tensions.
Asian Markets Also Suffer
Asian equity markets responded with widespread losses:
Japan’s Nikkei 225 slumped 2.7%
Hong Kong’s Hang Seng fell by 1.5%
Indian Stock Markets See Intraday Volatility
Back in India, markets followed the global trend:
BSE Sensex dropped 322 points (0.42%) to close at 76,295.36, after touching an intraday low of 75,807.55.
NSE Nifty closed 82 points lower at 23,250.10, having hit a day’s low of 23,145.80.
Pharma stocks offered some relief by trimming deeper losses during the day.
Conclusion: Trade War Fears Shake Investor Confidence
The sudden and aggressive tariff hike by the US has sent shockwaves through financial markets. With global trade relationships strained and warnings of a recession growing louder, investors are bracing for a volatile second quarter. All eyes are now on potential countermeasures from impacted countries and how the White House plans to manage the economic fallout.
Bringing you the latest updates on finance, economies, stocks, bonds, and more. Stay informed with timely insights.
Be First to Comment