President Donald Trump’s announcement of new tariffs targets dozens of U.S. trade partners April 2, 2025. US stocks took a hit Monday after Trump threatened to increase tariffs, despite the very clear indications of Wall Street to reconsider.
Trump had imposed steep tariffs on China, 34%, Taiwan & Vietnam ,32%, and the European Union at 20%. Leaving Economists and U.S trade partners confused and raising questions about the calculations done on the tariff rates as Trump claims this is how much US trade partners are charging the US. Investors had said stocks would start dropping on Thursday as a result. And indeed they have.
The stock market index, S&P 500 slipped 0.2% at the end of the day as financial markets worked to find out Trumps end goal for his trade war. Whether it was to open up more trade deals so he could lower tariffs and avoid a recession, or if it’s to remake the economy and stick with the tariffs for long term which will lower stocks further. Even the Dow Jones, another large market index, Industrial Average fell 0.9% and the Nasdaq Composite edges 0.1%
Though there was a surge the next day, having S&P go from a 4.7% loss to a leap of 3.4%, it’s biggest jump in years, it was because a rumor had gone around that Trump would make a 90 day pause on his tariffs. This was determined fake news by the White House, however with the fact that a rumor had moved trillions of dollars into the market by investors show their hope that Trump will dispose of this tariffs. Unfortunately stocks quickly went back down as soon as they got up.
In response China has reached out to other nations to make a united front against Trump’s tariffs, declaring they would fight to the end in this tariff war. As known China is the worlds second largest economy, and thus has already retaliated by putting Tariffs on the US. In response Trump further inflated the tax rate on chinese imports to 125%. Leaving investors, economists, and US citizens baffled as Trump has made it clear he does not care about the stock prices dropping even further, despite the clear impact to Wall Street.
So far, the presidents reasoning for his high tariffs were to being back manufacturing jobs to America, and to hab the country have more exports than imports. Despite that concept of a plan, it is clear that Trump’s tariffs are an attack on the globalization that has remade the world’s economy. Which has also brought down prices for products on US shelves, amd had been mutually beneficial. And now pressure is going on to the Federal Reserve as investors look for the central bank to step in and slash interest rates to protect this economy during downturns. The problem there lies in the fact that the Feds don’t have enough room to act this time around due to inflation, which is higher than the Feds and what anyone would prefer. Though lower interest rates could goose the economy, it can cause even more harm than good. Now leading us to to the possibility of a recession as inflation and these tariffs continue.
And the overwhelming truth of long term allies returning the same treatment. In response to Trump further inflating their tax rates, China has imposed a 84% tariff on US goods which have taken effect. As a lot of producers on US shelves were indeed ‘made in China’. Our top ten imports from China, from most to least include: Mobile phones, computers and accessories, electric and industrial equipment, toys, game, and sporting goods, clothing and textiles, car parts, household appliances, telecommunications equipment, furniture and household goods, cookware, cutlery and tools. One can only guess the further impact this will have on the market. Especially as China has begun to focus efforts on Europe.
Recently, a call between Premier Li Qiang and European Commission President Ursula von der Leyen, was a show of this united front against the US. With the tariffs having cost stocks in Hong Kong to drop 13.2%, their worse since 1997.
“We must solemnly tell the U.S.: a tariff-wielding barbarian who attempts to force countries to call and beg for mercy can never expect that call from China,” said Huang Jingrui a spokesperson for the local office of China’s Foreign Ministery. Who has reiterated that under these current circumstances, Beijing has no means to undergo negotiation with the US. And if they do, the US must,“immediately rectify its wrong practices and adopt the right attitude of equality, respect and mutual benefit.”
With US stocks edging lower and oil prices declining, Chinese shares shoes some moderate gains and the world market soared on Thursday. Congratulations to the US for uniting the world against itself. We now wait for Trump’s next move.
