On Thursday, U.S. markets experienced a free fall, shaken by President Donald Trump’s announcement of imposing massive tariffs on imports. The measure, framed as an attempt to balance global trade practices, sparked fears about economic growth, corporate profits, and international financial stability. The Dow Jones index lost 1,570 points, a 3.7% drop, while dozens of iconic stocks — from HP to Target — recorded double-digit declines.
The reaction was immediate and widespread. The dollar plunged to its lowest level of the year, reflecting distrust in the U.S. economic strength and the potential halt of foreign capital flows. Commodities like oil fell over 6%, and gold — a traditional safe haven in crises — also retreated after months of record highs. Even tech giants like Apple, Meta, and Amazon were not spared: Nike, for example, plummeted 11%, anticipating the blow to its global supply chains.
The Trigger: An Unprecedented Wave of Tariffs
Trump’s tariff plan, effective April 5, imposes a base levy of 10% on all U.S. imports. However, the real shock came with additional rates for countries deemed “trade violators”: Japan faces 24%, the European Union 20%, and China — already under heavy tensions — will see its tariff rise to 34%, totaling 54% when including previous taxes. The White House justifies this as aligning with tariffs other nations impose on U.S. products.
Canada and Mexico, though excluded from this reciprocal regime, were not entirely spared. Both remain subject to 25% tariffs on certain goods, with key exemptions like auto parts and vehicles. However, the measure on foreign-made cars — activated at midnight on Thursday — is already generating uncertainty in a deeply interconnected sector.
Investors, though aware of a potential adjustment after years of stock gains, underestimated the measure’s magnitude. Rising inflation expectations and a flight to Treasury bonds underscore this scenario.
Companies with offshore manufacturing are the most exposed. Nike, which produces in Vietnam and Indonesia; Apple, reliant on China; and even retailers like Target, which imports consumer goods, see their margins threatened.
Meanwhile, the Mexican peso strengthened following these measures, opening Thursday at 19.89 pesos per dollar — a rate unseen since October 2024.
Retaliation or Negotiation?
The international community reacted with a mix of outrage and caution. While European and Asian leaders vow countermeasures, others hope for last-minute negotiations. China, in particular, faces a dilemma: responding with similar tariffs could escalate a trade war, but backing down would mean losing influence in a year marked by geopolitical tensions.
The Real Risk: A Crisis of Confidence
Beyond the numbers, the true danger lies in eroding faith in global growth. Until now, markets had maintained cautious optimism despite 2025 corrections. But Trump’s tariffs test that resilience. If trade tensions persist, they could stifle investment, slow commerce, and, in the worst case, push key economies toward recession.
Thursday marked a turning point: not just due to losses, but what they symbolize. In a world where protectionism resurges as a political tool, every tariff is a reminder that economic stability hangs by a thread. As markets seek a floor, the resounding question is: will the world navigate this storm without repeating past mistakes?
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