President Donald Trump‘s 10% baseline tariffs on most U.S. imports took effect on Saturday.
What Happened: The new tariffs have sparked a significant market reaction, escalating U.S. duties to their highest level in over a century. The tariffs are a part of Trump’s strategy to stimulate domestic investment by companies seeking to evade import taxes.
While the baseline tariff is now active, higher duties on certain countries, which will replace rather than add to the 10% rate, are scheduled to start on April 9, reports Bloomberg.
As per reports, the latest tariffs imposed by Trump have triggered global discussions, with countries contemplating their response. The tariffs have pushed US duties to their highest point in over a century, shaking up the post-World War II trading system that Trump has frequently criticized as unjust.
The announcement on Wednesday resulted in the S&P 500 index of U.S. stocks plunging to its lowest in 11 months, wiping out $5.4 trillion of market value in just two trading sessions. This represents the steepest two-day drop since the pandemic reached the US in March 2020.
Also Read: Tariffs To Impact End Demand: Goldman Sachs Analyst Expects Drag On Corporate Spending, Hiring
Trump’s inconsistent messages regarding his willingness to negotiate the size and scope of his tariffs have further complicated matters for foreign leaders and business executives.
Last week on Thursday, Trump suggested a readiness to lower his duties if other nations proposed something “phenomenal.”
Why It Matters: The new tariffs have the potential to reshape global trade dynamics and could lead to retaliatory measures from other nations. The impact on the US economy and stock market is already evident, with the S&P 500 experiencing its sharpest drop since the onset of the pandemic.
The uncertainty surrounding Trump’s willingness to negotiate further complicates the situation, leaving global leaders and businesses in a state of flux as they navigate these unprecedented trade conditions.
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