The US President announced tariffs on Wednesday against major U.S. trading partners that were more aggressive than anticipated, sending shockwaves through global markets as investors worried the duties would stall the global economy, hit corporate earnings and stoke inflation. The market reaction was sweeping as the President said he would impose a 10% baseline tariff on all imports to the United States and higher duties on some of the country’s biggest trading partners. The new levies ratchet up a trade war that he kicked off on his return to the White House. The duties would erect new barriers around the world’s largest consumer economy, reversing decades of trade liberalization that have shaped the global order.
For investors, who started 2025 with high hopes of pro-growth policies from the new administration but have been spooked by a barrage of tariff-related headlines, Wednesday’s announcement was the clearest look yet at coming changes to the U.S. trade and tariff landscape.
U.S. stock futures fell, with S&P 500 E-minis ESc1 down 3.5%, while the euro was down 0.3%. As the President spoke at the event in the White House Rose Garden, markets were initially relieved as investors latched on to the 10% baseline tariff number, which was less punishing than they had feared. But then he unveiled much higher tariffs against certain countries. Some of China’s neighbors and biggest trading partners such as Bangladesh, Vietnam, Laos and Cambodia were slapped with the highest tariffs. Exchange-traded funds on these markets listed in New York slumped on the news.
Analysts expect trading partners to respond with countermeasures of their own that could lead to dramatically higher prices for everything from bicycles to wine. For U.S. stocks, Wednesday’s announcement comes at a particularly crucial moment. In mid-March the S&P 500 confirmed a correction, a drop of 10% from a recent high. The index was last down about 8% from its February record high.
Reporting by Saqib Iqbal Ahmed, Nupur Anand and Laura Matthews; Additional reporting by Suzanne McGee and Carolina Mandl; Editing by Megan Davies, Richard Chang, Sharon Singleton, Nick Zieminski, Andrea Ricci, David Gregorio and Nia Williams.
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