Led by the Trump administration, we’ve begun the most significant change in U.S. trade policy in decades. On April 2nd, they opened fire on that same economic landscape by announcing stinging new tariff rates. This decision applies a 10% universal tariff and modified baseline tariff rates. It aims to fundamentally change the way the world trades and in the process generates much-needed revenue for the federal government.
As of April 5, the new 10% universal tariff is now enforced on all imports coming into the United States. This extremely wide-reaching levy is just one piece of a bigger strategy that features much higher baseline tariff rates for almost 60 countries. Beginning April 9, these new “reciprocal” tariffs will take effect. They could be anywhere from 11% to 50%, representing further movement toward more protectionist policies within U.S. trade.
Adding to this pain are new tariffs on the automotive sector. As of April 3, new levies on foreign automobile imports and automobile parts—except those specified under the United States-Mexico-Canada Agreement (USMCA)—are in effect. Special payments tied to projects funded through omnibus appropriations bills under the PPWG. The current 25% tariffs on steel and aluminum imports will remain, making overall U.S. trade barriers increase.
The consequences of these measures are notable. Looking forward, the tariff analysts expect a huge increase in the effective tariff rate. It will jump from around 2% last year to more than 20% this year. In fact, this figure is the highest effective tariff rate in more than a century. It paints a picture of the administration’s bold, aggressive approach to trade.
Given such encouraging signs, we applaud the Wall Street Journal’s editorial board for going out on a limb. They call on foreign countries to remove their tariffs all at once. In fact, they argue that Trump’s “reciprocal” tariffs need to be reduced to zero. Such a change would go a long way towards creating a more level trading playing field.
The implications of these new tariffs go beyond trade dollars exported versus imported. They could radically change how markets operate in the future. Stop limit orders are proving to be an investor’s secret weapon. They combine characteristics of both stop orders and limit orders, which render them especially valuable in the volatile market that these tariffs have created. Once a stop limit gets triggered, it turns into a limit order. This modification makes it possible to execute the order at that price or higher.
Moreover, the role of Market Makers—over 500 NASD member firms that facilitate trading of NASDAQ securities—will be critical during this period of heightened tariffs and market adjustments. Their work is critical to making sure these markets maintain liquidity and stability in an otherwise uncertain environment.