US stocks drop slightly in 1st trading since Trump’s auto tariffs announced
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(NEW YORK) — U.S. stocks slid on Thursday in the first trading since President Donald Trump announced 25% auto tariffs, escalating a global trade war and prompting forecasts of higher car prices.
The Dow Jones Industrial Average fell 250 points, or 0.5%, while the S&P 500 dropped 0.5%. The tech-heavy Nasdaq declined 0.6%.
Shares of major U.S. automakers plunged in early trading. General Motors dropped more than 8%, while Ford fell nearly 3%. Stellantis — the parent company of Jeep and Chrysler — declined 4%.
Tesla, the electric carmaker led by Trump-advisor Elon Musk, bucked the trend. Shares of Tesla ticked up 1.5% in early trading on Thursday.
The 25% tariffs will be applied to imported passenger vehicles, including cars, SUVs, minivans, cargo vans and light trucks, according to a White House fact sheet released after Trump’s Oval Office remarks. The tariffs will take effect on April 3. The tariffs will also be applied to key imported auto parts, including engines, powertrain parts and electrical components.
The auto tariffs are set to target a sector that employs more than a million U.S. workers and relies on a supply chain intricately intertwined with Mexico and Canada.
Canadian Prime Minister Mark Carney on Wednesday called the measure “a direct attack on our workers.” The Canadian government plans to review its trade options, Carney said.
This is a developing story. Please check back for updates.
(WASHINGTON) — President Donald Trump on Friday voiced a willingness to ease tariffs on China, saying on social media it “seems right” to slash levies from 145% to 80%.
The announcement arrives a day before Treasury Secretary Scott Bessent is set to begin trade negotiations with Chinese officials at a meeting in Geneva, Switzerland.
The potential tariff reduction floated by Trump may avert a virtual standstill of trade between the world’s two largest economies, but the move would not substantially ease expected price increases for goods such as clothes, sneakers and toys, analysts told ABC News.
Product shortages would also remain a possibility at the lower tariff rate, they added.
“A tariff of 80% would still have a dramatic effect,” Christian vom Lehn, an economics professor at Brigham Young University, told ABC News. “It would mean a significant impact for consumers.”
Trump last month sharply increased tariffs on China, prompting China to retaliate with 125% tariffs on U.S. goods. The tit-for-tat measures set off a trade war with the third-largest U.S. trade partner, which accounted for nearly $440 billion worth of imports last year.
The tariffs elicited warnings from a slew of companies about the risk of price increases for U.S shoppers.
Toy giant Mattel warned in an earnings report this week of plans to shift some of its supply chain outside China, adding that when necessary it would take “pricing action in its U.S. business.” The move follows similar messages from electronics chain Best Buy as well as Chinese e-commerce retailers Shein and Temu.
Chinese shipments to the U.S. have dropped significantly, falling 21% in April compared to a year earlier, data from China’s General Administration of Customs on Friday showed.
Risks for consumers would continue to linger for two key reasons, analysts said: An 80% tariff would still amount to a punishing tax on imports, while uncertainty about the chance of another policy shift would make it difficult for companies to take full advantage of the lower rate.
Tariffs raise prices for consumers if importers fail to swallow the tax burden by eating into their profits or requesting a supplier sell the product at a lower rate in order to offset a share of the cost.
Under the current 145% tariff on Chinese goods, suppliers and importers face immense pressure as they try to bear some of the tax cost out of concern that higher prices would hurt sales, experts told ABC News. Due to the sky-high tariff, however, many sellers have little choice but to hike prices or risk losses, they added.
Those dynamics would remain in place at an 80% tariff rate, since it would still far exceed many companies’ capacity to offset the added cost with lower profits, Jason Miller, a professor of supply chain management at Michigan State University.
“An 80% tariff really doesn’t change things too much,” Miller said.
Trump’s announcement of a potential reduction of the tariff on China came two days after Trump ruled out any such lowering of the tariff level before negotiations.
The developments followed a weeks-long back and forth during which the two sides disputed whether they had already started discussing the tariffs.
The general sense of uncertainty would remain even after U.S. tariffs were to reach 80%, making it difficult for businesses to adapt their supply chains in a manner that would substantially ease costs and, in turn, offer relief for consumers, some analysts said.
“Even at a lower tariff, companies would have to be wondering whether this might go up again or or possibly come down again,” David Andolfatto, an economist at the University of Miami, told ABC News.
If companies could trust the possible 80% tariff level as a long-term policy stance, they may choose to reroute supply chains outside China or even initiate plans for some domestic production, Andolfatto said.
But each trade policy announcement put forward by Trump appears subject to change, Andolfatto said, noting several modifications already undertaken by Trump.
“If anything changes, the Trump administration can unilaterally react and come back to the negotiating table,” Andolfatto added.
For his part, Bessent has referred to the White House approach as a negotiating tactic, describing the policy changes as “strategic uncertainty.”
Testifying before a House subcommittee this week, Bessent said the Trump administration had commenced negotiations with 17 of the top 18 U.S. trade partners, excluding China. Those countries account for the vast majority of U.S. foreign trade, Bessent said.
Trump unveiled the framework for a trade agreement with the United Kingdom on Thursday, marking the first such accord with any nation since the White House suspended some of its far-reaching “Liberation Day” tariffs last month.
“Every country wants to be making deals,” Trump said in the Oval Office on Thursday, noting the upcoming talks between Bessent and Chinese officials.
(NEW YORK) — U.S. stocks climbed on Friday, shrugging off new Chinese tariffs on American goods that intensified a trade war between the two largest economies in the world.
The Dow Jones Industrial Average jumped 440 points, or 1.1%, while the S&P 500 surged 1.4%. The tech-heavy Nasdaq increased 1.6%.
Meanwhile, a selloff of 10-year Treasuries sent yields climbing to 4.46%. That figure neared a recent high attained hours before President Donald Trump announced on Wednesday a 90-day delay of so-called “reciprocal tariffs” for most U.S. trade partners.
A University of Michigan survey of shopper sentiment on Friday showed consumer attitudes fell more than expected in April, dropping to a level lower than any recorded during the Great Recession.
The market turmoil Friday morning came after China issued a 125% U.S. tariff, though Beijing said it would not increase tariffs further. The move came in response to a 145% tariff on Chinese goods announced by Trump earlier this week.
Larry Fink, the CEO of financial firm BlackRock, which manages about $11.5 trillion in assets, warned that the U.S. economy is poised for a downturn.
“I think we’re very close, if not in, a recession now,” Fink told CNBC.
In a social media post on Friday, Trump signaled confidence.
“We are doing really well on our TARIFF POLICY. Very exciting for America, and the World!!! It is moving along quickly,” Trump said on Truth Social.
U.S. markets closed Thursday with notable losses, a reversal from the enthusiasm unleashed by Trump’s Wednesday decision to pause some tariffs.
Several Asian stock markets slid back into the red on Friday morning, reversing gains made on Thursday amid continued uncertainty as to whether nations would be able to secure deals with Trump to avoid long-term tariffs — and as China announced new retaliatory tariffs on American goods.
Tokyo’s Nikkei 225 index slipped 3.8% and Japan’s broader TOPIX index fell 3.5%. In South Korea, the KOSPI dropped nearly 1% and Australia’s S&P/ASX 200 dipped 0.95%.
In China, markets fluctuated as investors responded to the White House clarifying that the level of tariffs on Chinese goods is now 145% — not 125% as previously believed.
Hong Kong’s Hang Seng index rose 2%, Shanghai’s Composite Index rose 0.6% and Shenzen’s Component Index rose 1.2%, with investors buoyed by Beijing’s announcement of stimulus measures to bolster the economy against the escalating American tariffs.
Other prominent Asia indices in the green on Friday included Taiwan’s Taiex index up 2.7% and India’s NIFTY 50 up 1.9%.
European markets appeared hesitant upon opening and slipped after China announced it would increase tariffs on U.S. goods from 84% to 125% from Saturday.
On Thursday, Trump again hinted at the resumption of his sweeping tariffs.
“If we can’t make the deal we want to make or we have to make or that’s, you know, good for both parties — it’s got to be good for both parties — then we go back to where we were,” Trump said.
When asked if he would extend the 90-day pause, the president responded, “We’ll have to see what happens at the time.”
(NEW YORK) — Stocks futures traded slightly higher early Wednesday, following another volatile day for the market amid the continued rollout of President Donald Trump’s tariffs on goods from top U.S. trading partners.
Dow futures were higher by 189 points or 0.46%. Both the Nasdaq and S&P 500 also appeared ready to open narrowly higher on Wednesday.
Traders are expected to be looking to Wednesday’s inflation report for clues on the health of the economy amid Trump’s escalting trade war. Expectations are that inflation will be up 2.9% compared to a year ago. A worse-than-expected report could add to negative stock sentiment.
Trump’s 25% tariffs on all imported steel and aluminum products came into effect overnight. The European Commission said EU member states would retaliate with duties on U.S. goods, sending European markets mostly higher.
Some economists say that while the tariffs could boost the local steel industry in the United States, they could also lead to higher prices for industries that purchase steel. Those higher prices may eventually reach consumers.
The U.S. relies heavily on imported aluminum and those costs are expected go up as well.
This is a developing story. Please check back for updates.
