Stocks fall in early trading Tuesday as tariffs take effect
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(NEW YORK) — The stock market fell in early trading on Tuesday, just hours after the Trump administration’s long-promised tariffs took effect.
The Dow Jones Industrial Average dropped nearly 800 points, or 1.8%; while the S&P 500 also fell 1.8%. The tech-heavy Nasdaq tumbled 1.6%.
The policy taxes imports from Mexico, Canada and China — the three largest trading partners of the United States — meaning that it could raise prices for everything from gasoline to avocados to iPhones.
Shares of retail giant Target fell 4.5% in early trading on Tuesday, following an earnings release from the company that cited “tariff uncertainty” as a potential impediment for the business. Walmart’s stock price dipped 1% on Tuesday, while Amazon shares fell 2%.
Shares of Best Buy plummeted more than 13% on Tuesday morning. The sharp drop came hours after Best Buy CEO told analysts that price increases are “highly likely” as a result of the tariffs.
Higher costs for car production could also pose a challenge for U.S. automakers, many of which depend on a supply chain closely intertwined with Mexico and Canada.
Shares of Ford tumbled 3% on Tuesday, while General Motors dropped more than 4%. Stellantis — the parent company of Jeep and Chrysler — saw shares plummet more than 7%.
Tesla, the electric carmaker led by Elon Musk, saw its stock price drop nearly 7%.
The far-reaching losses extend a market slide that began on Monday afternoon when Trump affirmed plans to impose a fresh round of tariffs.
Trump stuck to a March 4 start date for 25% tariffs on imports from Mexico and Canada, as well as 10% tariff on Chinese goods — which, as of Tuesday, rises to 20%, per an amended executive order.
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 duties also raise input costs for manufacturers that import raw materials.
In addition to Tesla and Amazon, the tariffs appeared to impact some of the other so-called “Magnificent Seven,” a group of large tech firms that helped drive stock market gains in recent years.
Chipmaker Nvidia, which relies on semiconductors from Taiwan but also imports some materials from Mexico, saw shares drop more than 2%.
Meta, the parent company of Facebook and Instagram, suffered a 4% drop in its stock price. Microsoft’s stock fell 1%.
Shares of Alphabet and Google defied the trend, however, remaining essentially unchanged in early trading on Tuesday.
This is a developing story. Please check back for updates.
(NEW YORK) — President Donald Trump has vowed to issue a fresh round of tariffs on April 2, presenting it as an inflection point for the economy weeks after a previous set of duties roiled markets and incited recession fears.
Trump has repeatedly referred to April 2 as “liberation day,” saying a wide-ranging slate of reciprocal tariffs would rebalance U.S. trade relationships.
Trump’s plan for reciprocal tariffs next week, however, is expected to be narrower than he previously vowed, though the plan remains under discussion, sources told ABC News this week.
The news of a potentially softer approach to forthcoming tariffs rallied U.S. stocks earlier this week, recovering some of the losses suffered earlier in March.
While key details remain unknown, new duties would ratchet up the global trade war, raising prices for an array of consumer goods and risking an economic slowdown, experts told ABC News.
“This certainly will be an escalation,” Mary Lovely, a senior fellow at the Peterson Institute for International Economics who studies trade policy, told ABC News. “We know the direction of travel, if not how far this will go.”
Here’s what the latest round of tariffs could mean for prices and the economy, according to experts:
Will the tariffs on April 2 raise prices? In setting tariffs for April 2, the U.S. will target countries that have major trade imbalances with the U.S., sources said.
“It’s 15% of the countries, but it’s a huge amount of our trading volume,” Treasury Secretary Scott Bessent said last week, describing the countries as a “Dirty 15.”
Last year, according to federal census data, the U.S. had its biggest trade deficits with China, the European Union, Mexico, Vietnam, Taiwan, Japan, South Korea, Canada and India, among other nations.
Reciprocal tariffs could raise prices for imported goods from those countries, since importers typically pass along a share of the tax burden to consumers.
The tariffs could hike prices for furniture and consumer electronics from Vietnam, fresh fruits and vegetables from Mexico, and cars from South Korea, experts told ABC News.
“This is going to mean prices will ultimately go up,” Jason Miller, a professor of supply chain management at Michigan State University, told ABC News.
The scale of price increases will likely depend on the tariff rate set by the Trump administration, which remains unclear, the experts said.
Speaking at the White House on Monday, Trump said the reciprocal tariffs could fall short of the rate that target countries impose on U.S. goods.
“I may give a lot of countries breaks,” Trump told reporters in the Oval Office. “I’m embarrassed to charge them what they’ve charged us.”
Kyle Handley, a professor of economics at the University of California, San Diego, said he expects consumer prices to rise enough for consumers to identify the change.
“Depending on what tariff rates they put in place, it could be pretty massive,” Handley said. “It will be a non-trivial increase in the price of imports. People will notice.”
What do the tariffs on April 2 mean for the economy? Experts told ABC News the fresh tariffs would put downward pressure on U.S. economic growth, since the additional tax burden for importing businesses and uncertainty about additional duties could deter private sector investment.
“A lot of the uncertainty about tariffs very likely has firms sort of frozen in place as they’re waiting to evaluate and see what happens,” Miller said.
Looming tariffs also risk unease among shoppers, threatening to undermine a key engine of the U.S. economy, some experts said. Consumer attitudes worsened more than expected in March, dropping to their lowest levels since 2021, a Conference Board survey on Tuesday showed.
Consumer spending, which accounts for about two-thirds of U.S. economic activity, could weaken if shopper sentiment sours, Bret Kenwell, U.S. investment analyst at eToro, told ABC News in a statement.
By some key measures, however, the economy remains in solid shape. A recent jobs report showed steady hiring last month and a historically low unemployment rate. Inflation stands well below a peak attained in 2022, though price increases register nearly a percentage point higher than the Fed’s goal of 2%.
Still, recession fears are mounting on Wall Street as businesses and consumers weather the trade war. Goldman Sachs earlier this month hiked its odds of a recession from 15% to 20%. Moody’s Analytics pegged the chances of a recession over the next year at 35%.
“These tariffs will be very detrimental for economic performance and business growth,” Handley said. “It may not take long for us to start seeing some of those effects.”
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(NEW YORK) — With more high-rise buildings than anywhere else in the U.S., New York City has long been a place where millions of people hope to achieve the American dream through careers in the construction industry.
While scores of construction workers are spending hours each day building the city’s newest apartment buildings, office towers and restaurants from the ground up, these properties have also become the locations of the city’s latest fraud scheme, according to some representatives of the construction and insurance industries.
“It isn’t a victimless crime,” Don Orlando of Tradesman Program Managers, which represents property owners and construction contractors, told ABC News. “These are small businesses that are getting victimized.”
Orlando alleges that hundreds of construction site incidents involving reported injuries were actually staged as part of a widespread conspiracy — and he said surveillance cameras are capturing some of these alleged fraudulent falls.
He pointed to a video that he says shows a man who “didn’t fall” and “just sat down” while an ambulance was on its way. The man filed a lawsuit claiming head and limb injuries, according to Orlando.
“That $200 or $300 investment in that camera saved that employer millions of dollars,” Orlando said.
Others said these claims are being blown out of proportion.
“If there was this rampant fraud going on, these cases would be dismissed by a judge or a jury,” New York personal injury attorney Nicholas Warywoda told ABC News. “That’s just not happening.”
‘The cost of doing work skyrockets’
Steve Katz has worked in the construction industry in the New York metropolitan area for more than 50 years, but said the last few years have been unlike anything he has ever experienced.
According to Katz, his concerns over fraud started eight years ago when one of his employees claimed to have fallen from a fire escape. After doctors said the employee was fine and could return to work, the man never came back, according to Katz, adding that his insurance company settled for $3.6 million.
“That’s when I went crazy,” Katz said. “I found out that I wasn’t the only one. My competitors told me they were all getting hit with these fake falls.”
Two years later, Katz said another construction worker sued him, alleging a fall on one of the properties where Katz’s crews were working. However, Katz said the employee’s colleagues told him that the employee told them that he was planning the fall in advance and was willing to teach them how to fake falls as well.
“Since then, I’ve had a total of eight of these phony lawsuits,” Katz said, adding that the extensive costs associated with fraudulent claims are being passed along to customers.
“We just raise our rates. The insurance companies raise their rates, and the cost of doing work skyrockets.”
Orlando explained that fraudulent construction accident cases can have financial implications for insurance customers throughout the U.S., even outside the nation’s largest city.
“If this was true, then why are the insurance companies not showing the proof that it’s actually lawsuits that are raising premiums and insurance costs?” Warywoda, whose firm frequently represents construction workers injured on construction sites in New York, said.
“One could say if the owners of the construction sites would just provide the appropriate safety measures that they’re required to, there wouldn’t be as many lawsuits,” he added.
One address, multiple lawsuits
Allegations of widespread fraud have caused increased scrutiny on lawsuits being filed by people claiming to be construction workers who were hurt on job sites.
In New York City’s outer boroughs, miles from the high-rise towers of Midtown Manhattan, reporting by ABC station WABC-TV found some claims coming from multiple people living at the same address.
One apartment building in the Bronx was home to 30 plaintiffs, while a two-story building nearby was listed as the home of 21 plaintiffs, according to WABC-TV’s report. In Queens, at least half a dozen people living in a six-unit apartment building said in court documents that they were injured on the job at construction sites.
“If you think about it, the law of averages tells you it’s really unlikely that there’s going to be this large number of people living at the same address, who are all in the same business, work for the same employer, have the same injury, have the same medical treatment and are going through the exact same things,” Michelle Rafield, the executive editor for Coalition Against Insurance Fraud, told ABC News.
Orlando’s company, Tradesman, claimed undocumented migrants are being recruited to participate in the scheme.
“They’re told, ‘Listen, we can teach you how to make millions. This is all you have to do. You have to fake a fall on a construction site,'” Katz said.
Katz and Orlando claim that some doctors and lawyers are in on the scheme, and that after the construction accidents are reported, the migrants undergo unnecessary surgeries and then become plaintiffs in slip-and-fall lawsuits
“I would call the plaintiffs in this case victims, because they are the ones being taken advantage of,” Orlando said.
Tradesman has now filed lawsuits of its own, taking over 100 defendants, including law firms and doctors, to federal court on accusations of racketeering.
“It’s morally wrong,” Orlando said. “Take out the fraud element. You’re taking advantage of someone who’s deprived as it is, and America is supposed to be the land of opportunities.”
Attorneys for dozens of the defendants say the allegations have no merit and that they intend to seek dismissals of the claims against them.
“The insurance industry and the industry lobby is very wealthy and very strong. They’re doing everything they can to tarnish and to change the civil justice system, which is only going to make it less safe for construction workers,” Warywoda, who isn’t among those accused in Trademan’s lawsuits, said. “It’s about putting profits over people.”
(NEW YORK) — China issued a warning on Wednesday night that it stands ready for any “type of war” with the United States in the aftermath of tariffs imposed hours earlier by the Trump administration.
A spokesperson for the Chinese foreign ministry said the tariffs would not lead to a resolution of U.S. concerns about fentanyl originating in China.
“If the U.S. truly wants to solve the fentanyl issue, then the right thing to do is to consult with China on the basis of equality, mutual respect and mutual benefit to address each other’s concerns,” Chinese spokesperson Lin Jian said at a press conference late Tuesday.
“If the U.S. has other agenda in mind and if war is what the U.S. wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end,” Jian added.
The remarks came soon after the Trump administration imposed 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.
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.
In a series of social media posts last month, Trump said he would place tariffs on Canada, Mexico and China for hosting the manufacture and transport of illicit drugs that end up in the U.S.
During an address to a joint session of Congress on Tuesday night, Trump also sharply criticized tariffs imposed by the Chinese government on U.S. goods.
“President Trump continues to demonstrate his commitment to ensuring U.S. trade policy serves the national interest,” the White House said in a statement on Tuesday.
Commerce Secretary Howard Lutnick said on Tuesday afternoon that Trump may soon offer Canada and Mexico a pathway to relief from tariffs placed on some goods covered by North America’s free trade agreement.
Lutnick did not mention a potential compromise with China.
