On April 2, President Donald Trump announced sweeping industry-wide tariffs. The end result was an unprecedented sell-off in global financial markets. The U.S. stock market plummeted as investors reacted to the unpredictable trade policies. While response was strong, international exchanges faced deep cuts as well.
The tariffs hit one and all with a 10% charge on everything that comes into the country. Further, imports from 57 targeted countries will be subject to increase duties as of April 9. Global markets immediately responded to the new tariffs just announced. By doing so over a mere two trading days, they deleted $7.46 billion in S&P Global Broad Market Index market cap, according to their calculations. This index is cap weighted. It gives a true picture of overall market performance and captures that big financial pinch.
Commerce Secretary Howard Lutnick affirmed that the White House would not postpone the implementation of the tariffs, stating that the administration is committed to maintaining its stance. “The tariffs are coming. He announced it, and he wasn’t kidding. The tariffs are coming. Of course they are,” Lutnick said, emphasizing the administration’s resolve.
Investors and analysts alike are intently watching the outcome ahead of an April 9 deadline. At the same time, the tariffs will hurt a wide variety of consumer products. As a consequence, American consumers could be left paying a premium. Under Secretary for International Affairs Scott Bessent reiterated the administration’s commitment to its trade policies. On trade policy, he highlighted they would certainly continue to “stay the course” with bilateral tariffs on traditional and historic U.S. partners.
Lutnick made it clear there will be no further delay of the start date on the tariffs themselves. “There is no postponing. They are definitely going to stay in place for days and weeks,” he confirmed. The administration’s inflexible position has led to increasing panic among investors. It’s concerns that they’ll face retaliatory actions from the countries that are going to be hurt.
It’s this disruptive trade policy that’s sending shockwaves across U.S. markets and the world. It’s no secret that investors are on edge over the instability of global trade relations. Some worry that these tariffs may be the catalyst that starts a series of trade wars, ushering in even more volatility in global financial markets.