US stocks plummeted after President Donald Trump announced new tariffs on imports, sparking concerns over the impact on global trade and the economy.
The 10% tariff on imported goods and higher levies on products from 60 countries deemed “bad actors” triggered a broad selloff in stocks, with the Dow Jones Industrial Average falling almost 3%. The S&P 500 dropped by 3.5%, while oil prices also fell.
Administration officials say they expect short-term pain but promise long-term gains for Americans. However, many investors and economists believe that Trump’s tariffs will cause prices to rise and weaken consumer demand, potentially triggering stagflation in which inflation continues to climb as growth slows.
The new taxes on imports could push the US effective tariff rate to between 25% and 30%, above the average of about 20% in 1933 under the Smoot-Hawley regime. Economists warn that the impact of these tariffs will be felt for weeks, with investors and businesses still grappling with uncertainty over trade policy frameworks.
The tariffs’ broad scope means it’s difficult to quantify how higher import costs will ripple across sectors. Trump’s announcement has sparked a “bear market” sentiment, with some analysts warning that tariffs may go up and down, but remain a core tenet of his domestic and foreign policy.
Source: https://www.politico.com/news/2025/04/02/wall-street-recoils-at-trumps-trade-war-00267768