Any glimpse of hope left for the stock markets before U.S. President Trump’s announcement of new tariffs has vanished as the scale of the unveiled tariff plans took investors by surprise.
Stocks, futures, indexes, fiat and crypto – all the components of the global financial market trading – have experienced a sharp plunge as U.S. “reciprocal” tariffs revealed during the so-called Liberation Day event appeared steeper than investors expected.
White House Trade Policy Updates
On April 2, 2025, during a public event dubbed “Liberation Day,” U.S. President Donald Trump announced a series of new or updated trade tariffs aimed at reshaping international economic and commercial relationships as well as allegedly boosting the national economy.
The White House’s tariff plan includes a baseline tariff of 10% on all imported goods from most countries, effective April 5, 2025, and additional tariffs on specific nations that are claimed to have unfair trade practices.
Thus, China will be subject to steeper reciprocal levies of 34% on top of the 20% previously imposed earlier this year. Vietnam faces a 46% tariff, Taiwan – 32%, India – 27%, Japan – 24% and the EU countries get an additional 20% import tariff. Many more countries are included in the list, with ‘reciprocal’ levies ranging from 16% to 49%.
Canada and Mexico were not included in the 10% baseline tariff, as shown on the chart displayed by Trump. However, the President did not mention whether the 25% tariff on most imports from these countries earlier scheduled for this week will be cancelled, so supposedly it will also take effect as planned after a one-month delay.
Besides the tariffs imposed on goods based on their country of origin, the White House also confirmed a 25% tariff on all imported autos effective April 3.
President Trump asserted that the protectionist tariffs would bolster domestic manufacturing and reduce reliance on foreign supply chains, ultimately “making America great again”. However, experts and investors do not seem to take this decision positively judging from the market’s immediate reaction.
Stocks and Futures Plummet in Response to Steep Tariffs
Stocks, which stabilised a bit just before the announcement in anticipation of final economic certainty, reversed sharply and plunged as the tariffs were unveiled.
At the moment of writing, S&P 500 futures have lost 3,95% in a day, Nasdaq 100 futures fell even steeper, shedding 4,4% of their worth, and Dow Jones Industrial Average futures have already declined by 3,7%.
Vanguard S&P 500 ETF went down 3,75%, while gold futures and options lost about 1% of value. U.S. 10-year Treasury yields went to the lowest levels since last October, and the USD index tumbled about 2%, marking its steepest single-day drop in over two years, to hit a six-month low.
Global stock markets also experienced turmoil. Japan’s benchmark Nikkei 225 has lost 2,77% today and over 7% during the last 5 days. South Korea’s KOSPI declined by over 4% in the last five days, with over half of the decrease happening after the tariffs news. Australia’s ASX 200 dropped by around 2%. Country-specific ETFs saw declines as well, with India’s ETF falling about 3%, Europe’s ETF down 2%, and China’s ETF dropping 3.8%. In Vietnam, which faced one of the highest levy rates, the benchmark VN-Index suffered one of the worst declines in its history, plunging by 6,6% at once. Some of the indexes have regained some value during the day but most remain stagnated.
As for the separate corporate stock, tech firms which largely depend on the import of chips and other components from Asian countries faced significant losses. Apple is trading 8,75% lower today, Nvidia stock lost 6,7% of its price, and Tesla went down about 6%. Amazon plunged over 8% as well, as the marketplace is heavily dependent on goods sold by third-party merchants in China and other foreign countries. The shares of Nike, which produced 50% of its footwear in Vietnam last year, plummeted 11,6%.
Crypto Market Cap Loses 6% in 24 Hours
Cryptocurrencies also reacted sharply to the news which suggests more economic tensions and trade disruptions. The global cryptocurrency market cap as of the moment of writing stands at $2.71 Trillion, down 6.23% in the last 24 hours and up 3.58% compared to one year ago.
Major cryptocurrencies have suffered significant losses. Thus, Bitcoin is trading at 5% less than yesterday, Ethereum went down 6,6%, XRP dipped over 7% and Solana declined by 11,7%. Meme coins DOGE and ADA lost about 10% of their worth each.
Despite the broader market turbulence, U.S. spot Bitcoin ETFs saw a net inflow of $220.76 million on April 2, ending a three-day streak of withdrawals. Fidelity’s FBTC and ARK 21Shares’ ARKB led the gains with inflows of $118.79 million and $130.15 million, respectively. BlackRock’s IBIT was the only Bitcoin fund to post losses of $115.87 million in redemptions.
However, Ethereum ETFs saw another day of withdrawals, with a total net outflow of $51.54 million, as the price of ETH dropped below $1,800.
Global Leaders Plan Tariff Responses
The markets are expected to remain volatile in the next days or possibly months as global leaders are considering counter-tariffs and other types of responses to the U.S. aggressive protectionist policies.
China has already urged the United States to immediately cancel its latest tariff decision, promising effective countermeasures to safeguard its national interests. Many countries are considering the same as their GDP is expected to nosedive under existing trade conditions.
In the weeks leading up to the significant policy updates, Vietnam decided to slash import levies on a range of products, including liquefied natural gas and vehicles, to minimise the negative effects of the tightening tariff policy of the United States. Meanwhile, the European Union said it would use a wide range of options to retaliate against the United States if US President Donald Trump implements more tariffs.
Many world leaders are considering joining their efforts in navigating the outcomes of the shifting international trade patterns. Thus, Asian economic leaders, China, Japan, and South Korea held their first trade dialogue in five years, discussing strategies to facilitate regional commerce in preparation for the negative impact of upcoming U.S. tariffs. In addition, Canada and India are trying to reduce the level of diplomatic tension between them, seeking to strengthen trade ties amid the rising price tag on U.S. imports.
Even before the exact details of the new tariff policies were publicly known, experts suggested it would negatively influence key economic indicators, such as inflation, employment and GDP of all the countries involved. Goldman Sachs has recently warned that aggressive trade policy actions by the White House will provoke inflation increase and unemployment growth, putting a halt to the economic rise in the United States. As the announced tariffs are higher than anticipated, we should probably also expect a worsening economic outlook from global analysts.
