Global reaction and retaliations rolled in and stocks plummeted Thursday after President Donald Trump unveiled a wide-ranging tariff program aimed at making U.S.-made products more attactive to American consumers amid claims from critics that the plan will trigger inflation and could spin the economy toward recession.
Trump declared sweeping tariffs of 10% on imports from all countries and much higher levies on the European Union nations and other trade rivals, a move that could fuel tensions in a global trade war and shake already nervous financial markets. The much-anticipated announcement fulfilled the president’s vow to hit back against countries he says have treated the U.S. unfairly.
Ursula von der Leyen, president of the European Commission, said Trump‘s levies were “a major blow” that will fuel inflation around the world. She said the EU would respond with countermeasures but provided no details.
The timing of the tariffs was curious to many economists.
“The U.S. has long used tariffs to collect revenue, aid manufacturing, and exert power,” said Andrew Cohen, author and history professor at the Maxwell School at Syracuse University. “But I can’t think of a trade war initiated so randomly in a time of peace and prosperity.”
Stocks fall globally; US futures down
U.S. stock index futures tumbled Thursday, global stocks slumped, government bonds jumped and safe-haven gold touched a record high after Trump slapped a 10% tariff on most goods imported to the United States and much higher levies on dozens of rivals.
Futures tracking the S&P 500 fell 3.26%, Dow futures dropped 2.58%, while Nasdaq 100 e-minis tumbled 3.73% hours before U.S. markets were to open.
Americans scramble for vehicles ahead of automobile tariffs
Some car dealerships are seeing an increase in business as car buyers try to get ahead of the 25% tariff on vehicles and parts produced outside the United States. Trump’s tariffs on vehicles kicked in this week and are expected to significantly increase the prices of new vehicles.
Higher prices for new cars are also expected to raise used-car prices, though it’s unclear when consumers can expect price hikes with lots still lined with cars and trucks that were not subject to the tariffs. Data from car-shopping app CoPilot found supply on dealership lots has dropped “significantly” since March 23, especially among foreign-manufactured vehicles.
“I think you’re starting to see a little more panic and concern about the tariff,” said Art Wheaton, director of labor studies at Cornell University’s School of Industrial and Labor Relations and a transportation industries specialist.
− Bailey Schulz, Jessica Guynn
Tariffs 101: Who pays for them?
Tariffs are primarily levied on imports, typically to protect industries in the country levying them. Tariffs make imports more expensive, thus making local goods cheaper by comparison. Tariffs also can provide income that can be used to support local industries, fund public programs or cover government expenditures.
And they can serve as bargaining tools to win concessions from trading partners.
“While tariffs may seem to penalize foreign producers by making their goods or services less competitive, the reality is that U.S. consumers and businesses ultimately bear the cost,” the Wilson Center scholars Diego Marroquín Bitar and Valeria Moy write in a
E.J. Antoni, a public finance economist and senior fellow at the conservative Committee to Unleash Prosperity, disagrees, saying in his opinion piece for Fox News earlier this month that economic history tariffs are always at least partly paid for by exporters, not just customers.”
