💥 "They go into effect tomorrow:" President Trump's Major Tariff Announcement
US stocks took a slide on Monday as investors buckled up for President Trump’s proposed ⚖️tariffs on Canada and Mexico which went into effect at the midnight deadline. The Dow fell by 650 points or 1.48%, closing at 43,191, with the S&P 500 and the Nasdaq Composite following suit.
🔔 "Tomorrow, tariffs - 25% on Canada and 25% on Mexico," Sounds Off Trump
According to Trump, the trading partners had “no room” left to negotiate, leading to the imposition of the tariffs as a punishment for countries taking more than they gave to the US economy. “They’re all set. They go into effect tomorrow,” he asserted.
📜 New Executive Order Raises Tariffs on China
On the same day, Trump also signed an executive order ramping up tariffs on Chinese imports from 10% to a whopping 20%. This move was an attempt to force China's hand on reducing fentanyl entry into the US, but the increase was due to China's perceived inaction on the matter.
💹 The Impact on the Markets
The repercussions of these actions were immediately felt in the stock market with the VIX, Wall Street’s fear gauge, surging to reach its highest point this year.
💭 The Experts' Take
- Gustavo Flores-Macias, professor at Cornell University, pointed out that the uncertainty surrounding tariffs has wiped out the 'Trump bump' amplifying upward pressure on prices and giving investors a reason to pause.
- Despite this, Gina Bolvin, president of Bolvin Wealth Management Group, remained optimistic stating, "I’m still a bull."
💸 The Significance of Trump's Trade Levies
These new tariffs are monumental - hitting a new high in US-China history. Following its implementation, experts estimate that it will affect $1.4 trillion worth of imported goods. Trump's tariffs also sparked discontent from China, with the Ministry of Commerce stating its strong opposition to the increased levy.
💡 Other Potential Effects
Analysts from Goldman Sachs indicate that while these tariffs will raise the prices of imported goods, they could also potentially boost demand for goods manufactured within the US. However, it’s not all roses as some US businesses may suffer due to increased production costs and likely foreign retaliation.
⏳ What's Next?
With the ongoing tariff developments, Jason Draho, head of asset allocation for UBS Global Wealth Management, expects the US stocks to remain volatile.
"Where do we go from here? How will Trump's tariffs reshape global trade and impact the global economy?"
Stay tuned for more developments on this breaking news.