Global markets reeled on Thursday after President Donald Trump announced sweeping tariffs on U.S. trading partners, sending shockwaves through financial systems already on edge over mounting trade tensions.
Speaking at a White House ceremony late Wednesday, Trump revealed a 10 percent across-the-board tariff on all imports to the United States, exempting only Canada and Mexico. Additionally, he announced sharply higher country-specific tariffs on a number of key trading partners. Chinese goods will face a staggering 34 percent tax, on top of the 20 percent tariff already in place. Imports from the European Union will be taxed at 20 percent, while Japanese goods will see a 24 percent levy.
The announcement caught investors and analysts off guard, triggering immediate market reactions. Futures on the S&P 500 index slumped over 3 percent in after-hours trading. Asian markets followed suit, with Japan’s Nikkei 225 plunging more than 3 percent, while indexes in Hong Kong and South Korea dropped nearly 2 percent.
Market analysts expressed alarm at both the magnitude and rationale behind the new tariffs. “I think the numbers are shockingly high compared to what people were expecting, and it is inexplicable in many ways,” said Peter Tchir, head of macro strategy at Academy Securities. “I think it’s a disaster.”
The White House defended the tariff structure, stating that the rates had been adjusted to account for currency manipulation and other economic practices it deemed unfair. However, experts questioned the methodology and warned of far-reaching economic consequences.
“This is essentially a trade war declaration,” said Andrew Brenner, head of international fixed income at National Alliance Securities. “It’s ridiculous. It shows no comprehension as to what he is doing to other countries. And it is going to hurt the U.S.”
The tariffs come amid heightened volatility in global markets, which have been whipsawed by conflicting signals from the Trump administration in recent weeks. Japan, a key U.S. ally, was particularly taken aback by the 24 percent tariff, given its traditionally low average tariff rate of just 2.4 percent on non-agricultural goods.
With no clear indication of how the tariffs were calculated and what retaliatory measures may follow, uncertainty has gripped investors and trade experts alike. The long-term impact on consumers, businesses, and the global economy remains to be seen, but Thursday’s market response suggests deep concern over a potential escalation in trade conflicts.
