A day after President Donald Trump announced universal tariffs against products from other countries, American assets were faring even worse than the countries Trump said he was trying to punish.
The president announced a baseline import tax of 10 percent on products from every country in the world late Wednesday afternoon, then hit products from about 60 countries with additional duties ranging from 20 percent to 49 percent. U.S. companies pay the tax, with the costs typically passed along the consumer.
After the announcement, U.S. equity index futures tumbled more than 4 percent, and a gauge of the dollar slumped, Bloomberg reported. Shares of multinational companies also cratered in premarket trading, with Nike and Apple dropping 9 percent and 7 percent, respectively, according to CNBC. Gap fell 9 percent and Tesla was down 4.1 percent.
On Thursday, stocks fell in other parts of the world, though not by as much. The Stoxx Europe 600 was down 1.9 percent, and a broad gauge of Asian stocks fell by up to 1.7 percent, making it clear that investors don’t foresee any winners in Trump’s latest trade war salvo.
And yet so far U.S. is the biggest loser, according to Bloomberg. On Wednesday, the dollar was headed for its worst day in over two years, and Treasury 10-year yields hit their lowest level since October.
Since taking office, Trump spent months going back and forth on whether to impose sweeping duties on products from Mexico, Canada, Europe, and Asia.
Business leaders had originally hoped the tariff threats were just a negotiating tool, but the president doubled down on them even as the markets plunged, consumer confidence dropped, and investors expressed alarm.
As a result, last quarter two of the three major U.S. stock markets posted their worst quarters since 2022, according to NBC.
The White House had hyped Wednesday as “Liberation Day”—the day Trump’s hazy tariff policy would finally come into focus—and the results were “worse than [forecasters’] worst-case scenarios,” according to some analysts.
Adding to investors’ concerns, for many countries the effective tariff rate will be even higher than Trump’s “Liberation Day” numbers.
For example, on Wednesday Trump announced a 34 percent tariff on products from China. But that tariff is in addition to an existing 20 percent duty—not in place of it—meaning the effective tariff rate for products from China will now be 54 percent, the White House told CNBC.
Traders had hoped Trump’s universal 10 percent to 20 percent tariff rate would be a cap—not a starting point for piling on even higher duties.
