Stocks slide as Trump’s ‘Liberation Day’ tariffs loom
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(NEW YORK) — Stocks fell on Monday ahead of the expected introduction of President Donald Trump’s sweeping tariffs on Wednesday, measures the president said will impact “all countries.”
The Dow Jones Industrial Average ticked down 10 points, or 0.03%, while the S&P 500 declined 0.7%. The tech-heavy Nasdaq plunged 1.5%.
Tesla, the electric carmaker led by billionaire Trump-advisor Elon Musk, dropped nearly 5%.
The downturn in U.S. markets followed a wave of selloffs worldwide.
Japan’s Nikkei index fell more than 4% and South Korea’s KOSPI slipped 3% after opening on Monday. In Europe, the British FTSE 100 fell by 1.18%, the German DAX index fell by 1.82% and France’s CAC 40 dropped by 1.76%.
Gold — a traditional safe-haven asset — reached a new record high of $3,128 per ounce.
Trump told reporters this weekend that his tariffs could affect “all the countries.”
“The tariffs will be far more generous than those countries were to us, meaning they will be kinder than those countries were to the United States of America,” he said.
“Over the decades, they ripped us off like no country has never been ripped off in history and we’re going to be much nicer than they were to us, but it’s substantial money for the country,” Trump said.
Auto tariffs of 25% are among those expected to come into effect on April 3. The measures will apply to imported passenger vehicles, including cars, SUVs, minivans, cargo vans and light trucks, according to a White House statement released last week.
Analysts widely expect the tariffs to raise prices for foreign-made cars, since importers will likely pass along a share of the tax burden to consumers.
Cars produced in the U.S. are also expected to undergo significant price hikes since manufacturers will bear higher costs for imported parts and face an uptick in demand as buyers seek out domestic alternatives, experts have told ABC News.
Trump dismissed concerns about auto tariffs this weekend. “The automakers are going to make a lot of money,” he said. “American automakers or international automakers, if you’re talking about them, are going to build in the United States.”
“The people that are going to make money are people that manufacture cars in the United States,” he continued. “Outside of the United States, that’s going to be up to them. I don’t care too much about that. But you have a lot of companies coming into the country to manufacture cars.”
ABC News’ Hannah Demissie contributed to this report.
(WASHINGTON) — Tariffs on goods from Mexico and Canada that are set to take effect could hike the price of a gallon of gasoline for some drivers by as much as 70 cents and send grocery bills climbing, experts told ABC News.
The Trump administration this week reiterated plans to slap 25% tariffs on all products from Canada and Mexico on Feb. 1. Those countries make up two of the three largest U.S. trading partners, government data shows.
Tariffs of this magnitude would likely increase prices paid by U.S. shoppers, since importers typically pass along a share of the cost of those higher taxes to consumers, experts said. The policy could raise prices for an array of products ranging from tomatoes to tequila to auto parts.
“The scary thing is the list of products is very, very long,” said Jason Miller, a professor of supply-chain management at Michigan State University.
The price impact remains unclear, however, since businesses within the supply chain could opt to take on some or all of the tax burden, some experts added, noting the tariffs may not take effect at all since Trump has previously used them as a source of leverage in international negotiations.
In response to ABC News’ request for comment, a White House spokesperson touted Trump’s previous economic policies, including tariffs.
“In his first administration, President Trump instituted an America First economic agenda of tariffs, tax cuts, deregulation, and an unleashing of American energy that resulted in historic job, wage, and investment growth with no inflation. In his second administration, President Trump will again use tariffs to level the playing field and usher in a new era of growth and prosperity for American industry and workers,” White House spokesperson Kush Desai told ABC News.
Here’s what to know about which products could see price increases as result of the tariffs, according to experts:
Gas
Mexico and Canada account for 70% of U.S. crude oil imports, which make up a key input for the nation’s gasoline supply, according to the U.S. Energy Information Administration, a government agency.
Those imports come primarily from Canada, which sends crude oil to U.S. refineries built specifically to process the crude and redistribute it as car-ready gasoline, Timothy Fitzgerald, a professor of business economics at the University of Tennessee who studies the petroleum industry, told ABC News.
Gasoline that originates as Canadian crude reaches customers in the upper Midwest as well as some along the East and West coasts, Fitzgerald said. For those drivers, he added, prices could rise between 40 and 70 cents per gallon of gasoline.
“You could definitely be looking at 50 cent-a-gallon increases in a lot of parts of the country,” Fitzgerald added, noting that the effects would be limited to the regions that rely on imported crude.
The tariff-related price increase may combine with a seasonal price hike set to take effect within weeks, since demand for gas typically grows as travel picks up in the warmer spring weather, experts said.
That seasonal price impact could add another 30 cents per gallon, putting the total increase in gasoline prices at $1 per gallon if the tariffs remain in place at the onset of spring, Fitzgerald said.
Tomatoes and Avocados
The U.S. imported $38.5 billion in agricultural goods from Mexico in 2023, making it the top recipient of such products, U.S Department of Agriculture data showed. Those imports include more than $3 billion worth of fresh fruits and vegetables.
Mexican imports account for a large share of some fruits and vegetables routinely eaten by Americans.
Roughly 90% of avocados eaten in the U.S. last year originated in Mexico, USDA data showed. Other products with a high concentration of Mexican imports include tomatoes, cucumbers, bell peppers, jalapenos, limes and mangos, Miller said.
It would be difficult for the U.S. to replace those goods with domestic production or an alternative supplier, making it likely that prices would rise significantly if the tariffs take effect, he added.
“You’d certainly expect to see an impact on prices,” Miller said.
The U.S. also imports large quantities of beer, tequila and other alcoholic beverages from Mexico, experts said. In 2022, the U.S. imported about $26 billion worth of alcoholic drinks from Mexico, according to the USDA.
“Don’t forget all that beer we import from Mexico,” Miller said.
Cars and auto parts
Carmakers and consumers depend on the auto industry’s deep ties to Canada and Mexico, making tariffs a threat to prices, experts said.
Mexico and Canada make up the top two U.S. trading partners for both finished motor vehicles and car parts, according to a Cato Institute analysis of data from the U.S. International Trade Commission.
In 2023, Canada and Mexico accounted for nearly $120 billion worth of U.S. motor vehicle imports, which totaled about 47% of all such vehicles imported that year. Canada and Mexico made up nearly the same share of auto parts imports that year, the Cato Institute analysis showed.
“The operations of auto companies on both sides of the border will be hugely affected by these tariffs,” Robert Lawrence, a professor of trade and investment at Harvard University’s Kennedy School of Government, told ABC News.
(NEW YORK) — U.S. stocks tumbled in early trading on Thursday as fallout from the Trump administration’s tariffs continued to roil markets.
Stocks recovered some of the losses within hours, however, after Commerce Secretary Howard Lutnick said a one-month delay of tariffs on Mexico and Canada would likely apply to all products compliant with the United States-Mexico-Canada Agreement, or USMCA, a free trade agreement.
Trump negotiated the USMCA during his first term, signing the agreement with Canada and Mexico in 2018.
“That which is part of President Trump’s deal with Canada and Mexico [is] likely to get an exemption from these tariffs,” Lutnick told CNBC on Thursday morning.
The Dow Jones Industrial Average fell about 150 points, or 0.35%, while the S&P 500 fell 0.7%. The tech-heavy Nasdaq dipped 0.9%.
The selloff erased some of the market gains delivered a day earlier after President Donald Trump gave U.S. automakers a one-month reprieve from the tariffs. Duties on a host of other goods remained in place, however.
The U.S. earlier this week slapped 25% tariffs on goods from Mexico and Canada, as well as 10% tariffs on imports from China. The fresh round of duties on Chinese goods doubled an initial set of tariffs placed on China last month.
The one-month delay in auto tariffs triggered a rally for shares of U.S. carmakers on Wednesday, but the largest companies in the sector turned down in early trading on Thursday.
Shares of Ford dropped 1.5%, while General Motors fell nearly 3%. Stellantis — the parent company of Chrysler and Jeep — saw its stock price fall 2%.
Tesla, the electric carmaker led by Elon Musk, tumbled 4.5% on Thursday.
The tariffs are expected to pose a challenge for U.S. automakers, many of which depend on a supply chain closely intertwined with Mexico and Canada.
The American Automotive Policy Council, or AAPC, a trade group that represents Ford, General Motors and Stellantis, praised the one-month tariff exemption.
“American Automakers Ford, GM and Stellantis applaud President Trump for recognizing that vehicles and parts that meet the high US and regional USMCA content requirements should be exempt from these tariffs,” AAPC President Matt Blunt told ABC News in a statement.
This is a developing story. Please check back for updates.
(ISSAQUAH ,WA) — In pursuit of increased wages and renegotiated employee benefits, more than 18,000 Costco union members nationwide voted to authorize a strike if the wholesale company doesn’t agree to their terms by Jan. 31.
The looming Costco strike marks the latest in a string of Teamsters union walkouts from employees of industry giants including Amazon and Starbucks.
The strike was approved on Sunday with more than 85% of Costco Teamsters voting in favor of hitting the picket lines if demands aren’t met.
The union said Costco had rejected contract proposals that included increased seniority pay, paid family leave, bereavement policies, sick time and safeguards against surveillance.
Bryan Fields, a Costco employee in Baltimore and member of Teamsters Local 570, told ABC News that the strike deadline comes after months of stalled conversations, extensions and failed negotiations with the company.
“They had plenty of months to negotiate and they would extend, extend, extend,” Fields, who has worked for the membership-only retailer for over a decade, claimed.
He and Teamsters spokesperson Matt McQuaid said negotiations with the company have been ongoing since August, without agreement.
ABC News has reached out to Costco Wholesale for a comment.
“No one wants to strike, no one’s excited about doing anything like that, and I’m sure they don’t want us to do that as well,” Fields said of the company, adding, “Let’s bypass all of that and just do what they promise in their code of conduct, which is ‘take care of employees.'”
According to Teamsters, Costco recently reported $254 billion in annual revenue and $7.4 billion in net profits, which marked a 135% increase since 2018.
While the details of the union’s negotiations with Costco’s top brass remain fluid, according to McQuaid, employees are “fully prepared” to picket come Feb. 1 if an agreement is not reached.
Last week hundreds of Costco Teamsters nationwide organized practice pickets from Hayward, California, to Sumner, Washington, and Long Island, New York, the organization said in a press release Sunday.
The 18,000 Teamsters union members who voted to authorize the strike account for 8% of Costco’s mostly non-union employees.
“Our members have spoken loud and clear — Costco must deliver a fair contract, or they’ll be held accountable,” Teamsters General President Sean M. O’Brien said in the release.
“From day one, we’ve told Costco that our members won’t work a day past January 31 without a historic, industry-leading agreement. Costco’s greedy executives have less than two weeks to do the right thing. If they refuse, they’ll have no one to blame but themselves when our members go on strike,” O’Brien added.
As of this month, there were 624 Costco Wholesale locations across the country.
The membership-only warehouse club chain is the third-largest retailer in the world behind Walmart and Amazon, with over 600 locations across the U.S.
Fields says employees who are the “backbone” of the multi-billion-dollar company’s success just want a “piece of the pie.” He hopes Costco can reach an agreement with union members before the strike terms expire, saying, “It’s in their hands right now.”
“The union is simply a voice of the people. They choose whether we become the weapon for the people. It’s as simple as that,” Fields said.
