UPD: According to Dow Jones Market Data, by the opening, the US market lost about $2.7 trillion in market capitalization, writes The Wall Street Journal. The last time such a sharp drop was recorded was on March 16, 2020.
The leaders in losses were Apple – $290 billion, Nvidia – $183 billion, and Amazon – $165 billion.
On Thursday, Trump imposed «retaliatory tariffs» on tariffs and non-tariff barriers set in other countries on American goods. He claimed that the new tariffs would increase the number of jobs in the manufacturing industry at home. Trump's list includes more than 180 countries, with the main targets being China, which received a «retaliatory tariff» of 34%, the EU — 20%, Japan — 24%, India — 26%, South Korea — 25%, and Taiwan — 32%.
According to the list published by the White House on the X website, even the Heard and McDonald Islands, located near Antarctica, covered with glaciers and inhabited by penguins, were affected by the tariffs, Axios noted. According to World Bank data, in 2022, the US imported goods worth $1.4 million from the Heard and McDonald Islands — almost all from the «machinery and electronics» category, as well as «manufactured goods», despite the islands having no people or buildings.
For the main competitors of the US, «tariffs» are imposed in combination with previously introduced ones. For example, for China, the total tariff will be at least 54%. Meanwhile, The Bell* notes that tariffs for China may be significantly higher than this figure: according to the publication's calculations, Trump's new tariff of 34% is summed not only with the previously introduced tariff of 20% but also with Trump's restrictions, which he adopted during his first term, and Joe Biden did not cancel. Thus, for China, the tariff may be at least 65%.
China promised to take retaliatory measures, and the European Union made the same decision. «Uncertainty will spiral and cause a rise in protectionism. The consequences will be dire for millions of people around the world», stated the head of the EU, Ursula von der Leyen, adding that the 27-member bloc is preparing to strike back if negotiations with Washington do not succeed.
The restructuring of the global trading system initiated by President Donald Trump harms American assets more than the assets of many large economies that he has just subjected to additional tariffs, writes Bloomberg. The dollar fell to a six-month low, the Japanese yen rose by 1.9% against the dollar, and the yield on 10-year Treasury bonds reached its lowest level since October, further exacerbating the situation with the dollar.
The announcement of tariffs put even more pressure on the US stock market, which was already struggling this year, as investors expected Trump's policies to lead to increased inflation and raise the likelihood of a recession in the world's largest economy. Even before the tariff announcement, the S&P 500 index fell by 3.6% this year, and the Nasdaq 100 lost about 7%. Shares of the tech «magnificent seven» also fell. Significant declines in Alphabet, Microsoft, Amazon, Nvidia, Apple, Tesla, Meta** were seen immediately after Trump's announcement of tariffs. For example, Apple lost 7.14% of its capitalization — that's $240 billion overnight, Microsoft — minus 2.92%, other companies — in the range of 5-6% decline.
While investors digested the news on Thursday, stock markets in Beijing and Tokyo fell to multi-month lows, notes Reuters. European stocks also sharply declined in morning trading, with Germany, the largest exporter of goods, suffering the most. According to estimates by the German research institute IW, tariffs will wipe out 750 billion euros from the EU economy.
As noted by experts from Bloomberg, the scale of the consequences is approaching the second financial crisis of 2008: three years after it, the US GDP remained 6% below the projected level.
Axios warns of a third recession in 17 years; since World War II, there have already been two, due to the financial crisis of 2009 and the COVID-19 pandemic. If Trump's tariffs remain in place and the US faces countermeasures from the countries targeted by the tariffs, this could become the third such economic «shake-up» in the last two decades.
«That's how you sabotage the engine of the global economy while claiming you want to lift it,» quotes Reuters Nigel Green, CEO of the global financial consulting company deVere Group. — The harsh reality is: these tariffs will lead to higher prices for thousands of everyday goods — from phones to food — and this will spur inflation at a time when it is already not very stable.»
According to Eswar Prasad, a professor of trade policy at Cornell University, Donald Trump, instead of fixing the rules of the game, simply «decided to blow up the system regulating international trade».
As The New York Times writes, Trump is ready to risk splitting NATO and the collapse of Ukraine. And if the price of ending the constant trade balance deficit is the risk of causing deep damage to the country's oldest and strongest alliances, he will not hesitate to resort to threats against his friends. While China may suffer the most in Trump's retaliatory tariff matrix, the next targets are American allies and partners: Japan, the European Union, India, South Korea, and even Switzerland.
The German Association of the Automotive Industry V.D.A. stated on Thursday that the tariffs mean a departure of the United States from the rules-based global trading system. «This is not «America First», this is «America Alone»,» said Hildegard Müller, President of V.D.A.
Meanwhile, Donald Trump himself, despite the market reaction, remains optimistic. «Operation completed! The patient survived and is on the mend. Prognosis: he will become much stronger, bigger, better, and more resilient than ever. Make America great again», he wrote on Truth Social.
* Recognized as a «foreign agent» in Russia.
** Recognized as an «extremist» organization in Russia.
Photo: The New York Times