(NEW YORK) — U.S. stocks continued their slide in early trading on Friday, just hours after China announced retaliatory tariffs in response to President Donald Trump’s “Liberation Day” levies.
The Dow Jones Industrial Average plummeted 925 points, or 2.25%, while the S&P 500 dropped 2.4%. The tech-heavy Nasdaq declined 3%.
On Friday, China said it will impose 34% tariffs in response to the levies issued by Trump earlier this week.
In a social media post hours later, Trump signaled a commitment to the tariff policy.
“TO THE MANY INVESTORS COMING INTO THE UNITED STATES AND INVESTING MASSIVE AMOUNTS OF MONEY, MY POLICIES WILL NEVER CHANGE,” Trump said on Truth Social.
All three major American stock markets closed down on Thursday, marking their worst day since June 2020 during the COVID-19 pandemic.
The NASDAQ fell 6%, the S&P 500 4.8% and the Dow Jones nearly 4%
Global markets gave early signals of the difficulty to come on Friday. Japan’s Nikkei index lost 3.5% on Friday, while the broader Japanese Topix index fell 4.45%.
In South Korea, the KOSPI index was down 1.7%, with the country grappling with both Trump’s tariffs and the news that South Korea’s Constitutional Court upheld the impeachment of President Yoon Suk Yeol.
Indian investors joined the sell-off on Friday, with the Nifty 50 and BSE Sensex indexes both falling more than 1%. India’s stock markets had previously performed better than others thanks to lower tariffs than competitors like China, Indonesia and Vietnam.
Australia’s S&P/ASX, meanwhile, continued its slide into Friday with another 2% drop taking the index to an 8-month low.
In Europe, too, stock markets fell upon opening. Britain’s FTSE 100 index dropped more than 1%, Germany’s DAX fell 0.75%, France’s CAC lost 0.9% and Spain’s IBEX slipped 1.4%.
Trump’s Wednesday announcement of tariffs on nearly all American trade partners sent U.S. and foreign markets alike into a tailspin.
ABC News’ Leah Sarnoff, Max Zahn, Victor Ordoñez and Zunaira Zaki contributed to this report.
(WASHINGTON) — America’s closest neighbors, Canada and Mexico, excoriated President Donald Trump for slapping historic tariffs on goods from their countries.
Trump’s broad tariffs went into effect on Tuesday, along with increased duties on goods from China, a move that prompted a swift retaliation from Beijing.
“President Trump continues to demonstrate his commitment to ensuring U.S. trade policy serves the national interest,” the White House said in a statement.
Goods entering the U.S. from Mexico and Canada will carry a 25% tariff, while those from China will be subject to a 10% increase on existing tariffs, according to the White House.
U.S. tariffs are at their highest level since 1943, Yale’s Budget Lab said.
On Feb. 27, Trump alleged that illicit drugs such as fentanyl had continued to enter the U.S. through Mexico and Canada despite agreements reached last month to address the issue.
Since September, nearly all fentanyl seized by the U.S. came through the Southern border with Mexico, according to the U.S. Customs and Border Patrol, or CBP, a federal agency. Less than 1% of fentanyl was seized at the Northern border with Canada, CBP found.
Canadian Prime Minister Justin Trudeau sharply criticized the tariffs, calling them a “dumb” policy that does not “make sense.”
The reason for the tariffs is based on a false allegation about Canada as a major source of drugs entering the U.S., Trudeau added.
“It’s an example of [Trump] not really being able to see what it is that he wants, because even the excuse that he’s giving for these tariffs today of fentanyl is completely bogus, completely unjustified [and] completely false,” Trudeau said.
In response, Canada slapped a 25% retaliatory tariff on $30 billion worth of goods. Tariffs on an additional $125 billion worth of products will take effect in 21 says, Trudeau said.
“We will not back down from a fight,” Trudeau added.
Meanwhile, Mexican President Claudia Sheinbaum announced plans to impose retaliatory tariffs on U.S. goods.
“There is no motive or reason, nor justification that supports this decision that will affect our people and our nations,” Sheinbaum said. “We have said it in different ways: cooperation and coordination, yes; subordination and interventionism, no.”
Sheinbaum said she will speak over the phone with Trump on Thursday, and if no deal can be reached, she’ll announce the tariff and non-tariff measures at a rally on Sunday.
China’s response
Within minutes of the new U.S. tariffs taking effect, China unveiled on Tuesday its initial response by placing additional 10% to 15% tariffs on imported U.S. goods, like chicken, wheat, soybeans and beef.
Those duties will be on top of similar tariffs imposed back during the first Trump administration’s trade war in 2018. Some of those tariffs are already at 25%, though Beijing issued some waivers as a result of the 2020 “phase one” trade deal.
The new Chinese tariffs are set to come into effect for goods shipped out next Monday, March 10.
Stock prices plummet
Stock futures for the three major U.S. indexes were close to flat early Tuesday following the selloff on Monday as Trump announced his proposed tariffs would go into effect at 12:01 a.m.
Stock prices plummet
Stock futures for the three major U.S. indexes were close to flat early Tuesday following the selloff on Monday as Trump announced his proposed tariffs would go into effect at 12:01 a.m.
Asian markets were mixed on Tuesday. The Shanghai Stock Exchange climbed less than a percentage point, while the Nikkei in Japan slipped about 1.2% and the Hang Seng in Hong Kong closed down about 0.3%.
European markets mostly traded off on Tuesday, with the DAX in Germany down about 1.6% and the FTSE 100 slipping about 0.3% midday.
The U.S. tariffs arrived about a month after Trump granted Mexico and Canada a reprieve, having reached agreements with the two countries regarding border security and drug trafficking.
ABC News’ Zunaira Zaki and Anne Laurent contributed to this report.
(NEW YORK) — Consumer prices rose 2.8% in February compared to a year ago, easing slightly over the first full month under President Donald Trump and offering welcome news for markets roiled by a global trade war. Inflation cooled more than economists expected.
Price increases slowed from a 3% inflation rate recorded in January, though inflation remain nearly a percentage point higher than the Federal Reserve’s target of 2%.
Egg prices, a closely watched symbol of price increases, soared 58.8% in February compared to a year ago, accelerating from the previous month. Bird flu has decimated the egg supply, lifting prices higher.
The Justice Department opened an investigation into egg producers to learn if market practices have contributed to the price hikes, a source familiar with the matter told ABC News.
Prices dropped for tomatoes, cereal, cupcakes and cookies over the past year. Some grocery prices increased faster than the pace of overall inflation, however, including beef, biscuits and apples.
A rise in housing costs accounted for nearly half of the price increases last month, the U.S. Bureau of Labor Statistics said. A decline in the price of airline tickets and gasoline helped offset some of the increased costs, the agency said.
The inflation report arrived hours after the U.S. imposed 25% tariffs on steel and aluminum, prompting near-immediate retaliatory duties from the European Union and marking the latest escalation of trade tensions.
Tariffs are widely expected to raise prices for consumers, since importers typically pass along a share of the added cost to shoppers.
The stock market has plunged since Trump imposed tariffs on Mexico, Canada and China last week, giving rise to warnings on Wall Street about a potential economic downturn. Within days, Trump delayed some of the tariffs on Canada and Mexico.
The report on Wednesday may soften pressure on the Federal Reserve, which bears responsibility for keeping inflation under control.
Federal Reserve Chair Jerome Powell last week said the administration’s tariff plan would likely raise prices for U.S. shoppers and retailers.
The scale and duration of the tariffs remain unclear, but a portion of the taxes on imports will probably reach consumers, Powell told an economic forum in New York City last week.
“We’re at a stage where we’re still very uncertain about what will be tariffed, for how long, at what level,” Powell said. “But the likelihood is some of that will find its way. It will hit the exporters, the importers, the retailers and to some extent consumers.”
On multiple occasions in recent days, the White House declined to rule out a possible recession, saying the tariffs would require a “period of transition.”
A solid, albeit disappointing jobs report on Friday exacerbated concerns among some observers.
Employers hired 151,000 workers last month, falling short of expectations of 170,000 jobs added. The unemployment rate ticked up to 4.1%, which remains a historically low figure.
The Trump administration 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.
A day later, Trump issued a one-month delay for tariffs on auto-related goods from Mexico and Canada. The carve-out expanded soon afterward with an additional one-month pause for goods from Mexico and Canada compliant with the United States-Mexico-Canada Agreement, or USMCA, a free trade agreement.
On Tuesday, Trump announced plans to add another 25% tariff on Canadian steel and aluminum, bringing the total to 50%. The move came in response to threats made by Ontario to cut off electricity to parts of the U.S., Trump said.
Hours later, Ontario Premier Doug Ford issued a joint statement with U.S. Commerce Secretary Howard Lutnick on X announcing the suspension of the 25% surcharge on electricity sent to the U.S.
The tariffs slapped on Canada, Mexico and China are widely expected to increase prices paid by U.S. shoppers, since importers typically pass along a share of the cost of those higher taxes to consumers.
A key gauge of consumer confidence registered its largest monthly drop since August 2021, the nonpartisan Conference Board said in February.
The share of consumers who expect a recession within the next year surged to a nine-month high, the data showed. A growing portion of consumers believe the job market will worsen, the stock market will fall and interest rates will rise, the report added.
ABC News’ Katherine Faulders and Soo Youn contributed to this report.
(NEW YORK) — Consumer prices rose 3% in January compared to a year ago, ticking up from the previous month and posing an obstacle for Trump administration tariff policies that many economists expect to raise some prices, government data on Wednesday showed. The inflation reading came in higher than economists had predicted.
The fresh data extends a bout of resurgent inflation that stretches back to last year. Two weeks ago, the Federal Reserve opted to hold interest rates steady in part out of concern regarding the stubborn price increases.
Egg prices, a closely watched symbol of rising costs, soared 53% in January compared to a year ago. An avian flu has decimated the egg supply, lifting prices higher.
Beef prices climbed 5% and bacon prices jumped 6% in January compared to a year ago, data showed. By contrast, prices dropped over that same period for bread, rice and tomatoes.
Core inflation — a measure that strips out volatile food and energy prices — increased 3.3% over the year ending in December, ticking lower than the previous month, the data showed. That gauge also sped up from the previous month.
Inflation has slowed dramatically from a peak in June 2022, but price increases remain a percentage point higher than the Fed’s target rate.
Since Trump took office on Jan. 20, he has announced a series of tariffs, which economists say could push prices higher. Tariffs on steel and aluminum announced by Trump this week could raise prices for a set of products that includes refrigerators, beer and automobiles, experts previously told ABC News.
In a post on Truth Social on Wednesday morning, Trump appeared to fault former President Joe Biden for the uptick in inflation, writing: “BIDEN INFLATION UP!”
Biden served during more than half of the month of January, leaving office on Jan. 20. Trump, however, said during the presidential campaign earlier this year that he would bring down prices “starting on day one.”
This is a developing story. Please check back for updates.
