April 2, 2025 – US stock futures dived on Tuesday evening after a shock statement by former President Donald Trump that the government under him would levy very aggressive new tariffs on imports, spooking markets about the resumption of a global trade war. The move created a shockwave across markets, plunging Dow Jones Industrial Average futures by over 950 points, almost 2.4%. S&P 500 futures sank 3.4%, while tech-skewed Nasdaq 100 futures dipped 4.3%.

The drops followed Trump’s announcement of a 10% across-the-board tariff on all foreign imports, with significantly higher rates against specific U.S. trade partners. Imports from China will be 34%, from the European Union and Japan, 20% and 24%, respectively. The policy rationale is to reduce trade deficits and return American manufacturing to the United States, Trump claims.

“These tariffs are about taking back our economy,” Trump announced at a news conference. “For decades, other countries have taken advantage of the United States. That’s over now.”

Wall Street Reacts: Tech and Multinationals Hit Hard

Investors acted quickly to react, pulling back from those companies most exposed to global trade. Technology shares declined the most, especially firms with complex global supply chains. Apple Inc. (AAPL), Nvidia Corp. (NVDA), and Amazon.com Inc. (AMZN) all traded significantly below their normal session levels in after-hours trading.

The Philadelphia Semiconductor Index dropped nearly 5%, as chipmakers will likely face higher expense on imported raw materials and potential export curbs abroad. Multinational consumer firms, carmakers, and machinery makers also dropped precipitously.

“Markets don’t like uncertainty, and this news introduces a lot of uncertainty,” said Emily Roland, co-chief investment strategist at John Hancock Investment Management. “Investors are now factoring in lower growth and higher input costs.”

Business Groups Warn of Higher Prices and Slower Growth

Certain business lobby organizations criticized the tariffs as soon as they were introduced, stating that in the end American consumers will be paying for them.

David French, executive vice president for the National Retail Federation, described in a statement: “Tariffs are taxes. These general import taxes will raise costs to businesses and consumers. This will likely drive inflation at a time when many families are already stretched to the limit.”

The U.S. Chamber of Commerce also sent a similar warning, calling on policymakers to re-evaluate unilateral trade measures. “These tariffs will hurt American competitiveness and expose the United States to retaliatory action by our principal allies and trading partners,” the organization stated.

Global Backlash: Allies and Adversaries Respond

There was an instant international reaction. Norway’s Minister of Trade and Industry, Cecilie Myrseth, described the change in policy as “deeply concerning” and “serious for the world economy.”

Australian Prime Minister Anthony Albanese spoke directly about the decision, stating, “This is not the act of a friend. These tariffs will hurt both sides.”.

China, the target of the highest tariff rate, threatened to retaliate on an equivalent basis. The Ministry of Commerce of the People’s Republic of China made a statement promising to “take all necessary measures to defend China’s economic interests,” proposing possible tariffs on U.S. agricultural goods, automobiles, and technological components.

The European Commission expressed disappointment as well and said it was looking at legal and trade options under the World Trade Organization.

Economic Outlook: Risks of Inflation and Trade Retaliation

Implementation of broad tariffs again would complicate the economic scenario in 2025. While inflation has slowed down in recent months, high import prices can reverse the process. Higher consumer prices would increase pressure on the Federal Reserve, which has stated that it is near the end of the phase of raising interest rates.

If these tariffs stick, the Fed could be forced to reconsider its pause,” Jefferies chief economist Aneta Markowska said. “This adds a new level of uncertainty at a time when the economy is tightrope walking.”

Experts warn that if foreign governments retaliate with tariffs, U.S. exporters—particularly in agriculture, aerospace, and autos—would be in for a big hit.

What Investors Should Watch Next

Investors will be closely watching for:

• Official retaliation from China, the EU, or Japan
• Statements from the Federal Reserve regarding inflation risks tied to tariffs
• Earnings revisions from multinational companies affected by trade costs
• Consumer sentiment data, which could signal how households are responding to higher prices

In the short term, there should still be high market volatility. Safe-haven assets such as U.S. Treasury debt and gold made slight gains in after-hours trading, while cyclical stocks—especially industrials and technology—suffered the greatest losses.

Traders may shift their focus to more defensive sectors such as healthcare, consumer staples, and utilities that fare better during periods of economic uncertainty.

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Bottom Line

Trump’s tariff announcement marks a significant escalation in global trade tensions. The market’s reaction suggests deep concern over the potential for a broad-based economic slowdown if the policy leads to retaliatory measures and disrupted supply chains.

With uncertainty dominating the outlook, investors, businesses, and policymakers will need to tread carefully.

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Sources
https://finance.yahoo.com/news/live/stock-market-today-nasdaq-futures-lead-stock-plunge-dow-drops-1000-points-as-trumps-punishing-tariffs-rip-through-markets-000611007.html
https://www.theguardian.com/us-news/live/2025/apr/02/donald-trump-tariffs-trade-latest-live-us-politics-news
https://apnews.com/article/7b5da6b0302cbd6d6ca105d48256384c