Trump's Tariffs Spark Steepest US Stock Market Drop Since 2020

Global stock markets experienced significant drops following President Donald Trump's announcement of sweeping new tariffs. These tariffs are expected to increase prices and slow growth both in the US and globally.

Stock markets in the Asia-Pacific region fell for a second consecutive day, mirroring the steep decline seen in the US S&P 500, which recorded its worst day since the COVID-19 pandemic. Major consumer stocks like Nike, Apple, and Target took a hard hit, all experiencing losses of over 9%.

 

Trump's Economic Strategy and Tariff Plans

At a press conference, President Trump expressed confidence that the US economy would "boom" due to the 10% tariff he plans to impose on global imports. The tariffs are designed to boost federal revenues and encourage American manufacturing.

Trump's broader plan includes even higher tariffs on goods from numerous trade partners, including China and the European Union (EU).

 

China and EU Retaliate Against Tariff Measures

In response, both China and the EU vowed to retaliate, with China facing an aggregate tariff rate of 54%, while the EU will endure duties of up to 20%.

French President Emmanuel Macron has called for European companies to suspend planned investments in the US.

 

The Global Impact of Tariffs on Trade and Growth

Tariffs, essentially taxes on imported goods, are set to increase to levels unseen in over a century. According to the World Trade Organization, the tariffs could shrink global trade volumes by 1% in the current year, raising concerns about inflation and potential economic slowdowns.

In morning trading on Friday, stock markets continued to react negatively. Japan's Nikkei 225 index fell by 2.7%, while Australia's ASX 200 dropped 1.6%. The Kospi in South Korea showed only slight changes.

 

US Stock Markets Lose Billions

On Thursday, the S&P 500 fell 4.8%, losing approximately $2 trillion in value. The Dow Jones and Nasdaq also posted substantial declines, with the Nasdaq tumbling by nearly 6%. The sell-off in US stocks has been ongoing since mid-February, primarily driven by growing concerns over the escalating trade war.

Meanwhile, European markets followed suit, with the UK's FTSE 100 falling 1.5%, and other major European markets also seeing declines. The global downturn highlights the widespread consequences of Trump's tariff policies.

 

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