U.S. stock index futures experienced a significant decline on Wednesday evening following the announcement by President Donald Trump of a minimum 10% tariff on all imported goods, alongside substantially higher reciprocal duties imposed on select countries. S&P 500 Futures experienced a decline of 3.6%, settling at 5,505.25 points, whereas Nasdaq 100 Futures fell by 4.5% to reach 18,875.50 points as of 20:02 ET (00:02 GMT). Dow Jones Futures declined by 2.5%, settling at 41,443.0 points.
Trump reveals tariffs that exceed market expectations
On Wednesday, President Trump unveiled a comprehensive set of tariffs, instituting a 10% levy on all imports while imposing markedly elevated rates on nations classified as “bad actors.” China is subject to an incremental 34% tariff, in addition to the existing 20% duties currently imposed. Tariffs imposed on the European Union, Japan, and other nations will be set between 20% and 49%. The comprehensive tariffs will be implemented on April 5, while the increases specific to individual countries will commence on April 9. Canada and Mexico were specifically excluded from this baseline rate owing to pre-existing agreements; however, they remained subject to a 25% tariff on the majority of goods.
A 25% tariff on foreign-manufactured automobiles and essential auto components is scheduled to be implemented on April 3, 2025. Trump defended the implementation of tariffs by highlighting perceived inequities in trade practices and instances of currency manipulation, claiming that such actions would revitalize domestic industries and alleviate the national debt. Financial markets exhibited a negative response, as U.S. stock futures declined significantly due to apprehensions surrounding inflation and the possibility of retaliatory measures from major trading partners.
President Trump has unveiled a series of tariffs aimed at financing income tax reductions and encouraging the repatriation of manufacturing activities. According to analysts at ING, while the long-term outlook may yield benefits for the US economy, the implemented measures indicate a challenging transition period is imminent. Following the market’s closure, U.S. President Donald Trump declared that the United States will implement reciprocal tariffs starting at a minimum of 10% on all imported goods, with elevated rates for certain countries that will correspond to “half” of the tariffs they impose on U.S. exports. Canada and Mexico have been excluded from the reciprocal tariff list. Trump has also affirmed that the previously scheduled 25% tariffs on imported automobiles and auto parts will take effect at midnight. The Trump administration has instituted a 25% tariff on goods imported from Mexico and Canada, in addition to the tariffs imposed on imported automobiles, along with a similar 25% tariff on steel and aluminum products.
As the announcement of tariffs by Trump approaches, the office of Canada’s Prime Minister Mark Carney has indicated that he engaged in discussions with Mexican President Claudia Sheinbaum regarding Ottawa’s strategy to address the “unjustified” levies imposed by the U.S. Canada and Mexico rank among the United States’ most significant conventional trading partners. Ontario Premier Doug Ford addressed CNBC, promoting the idea of excluding Mexico from the USMCA trade agreement, while asserting that Canada would eliminate all tariffs contingent upon similar actions from the United States. He expressed skepticism regarding Trump’s “Liberation Day,” referring to it as “Termination Day,” highlighting the possible adverse effects on employment and market stability should additional tariffs be enacted.
On Wednesday, major stock indices experienced an uptick in value ahead of the anticipated tariff announcement from Trump. On Wednesday, during standard trading hours, the S&P 500 experienced an increase of 0.7%, whereas the NASDAQ Composite saw a rise of 0.9%. The Dow Jones Industrial Average experienced an increase of 0.6% at the close of trading.
Tesla Inc (NASDAQ:TSLA) shares experienced a 5.3% increase on Tuesday following reports suggesting that CEO Elon Musk may resign from his governmental position to concentrate on the company’s operations. Musk subsequently characterized the assertion as “fake news.” The electric vehicle manufacturer published its first quarter delivery report on Wednesday, recording 336,681 vehicle deliveries during the period, which fell short of the average forecast of 390,000 deliveries. The company’s shares experienced a decline of 7.7% in after-hours trading, reflecting a trend consistent with the overall market, largely driven by concerns surrounding tariffs.