By Jack Phillips
Contributing Writer
The three major U.S. stock indexes dropped on Thursday morning after President Donald Trump announced sweeping tariffs of 10% or higher, with the Dow Jones Industrial Average plunging by approximately 1,400 points at one point in the early trading period.
Aside from the Dow Jones tumbling, the S&P 500 Index dropped by 3.2%, and the Nasdaq Composite slid by more than 4.2% at around 9:35 a.m. EST.
Major multinational companies also saw declines. Nike saw an 11% decline, Apple dropped by about 7%, Gap was down by 12%, Target was down by 9%, Amazon shed more than 6%, Five Below dropped by 22%, Dollar Tree tumbled by 9%, and HP Inc. shed 13%, among others.
On Wednesday evening, Trump announced a minimum tariff of 10% on imports from all countries into the United States, with the tax rate running much higher on products from certain countries such as China and those from the European Union.
In stock markets abroad, indexes fell worldwide. France’s CAC 40 dropped by 3.1%, and Germany’s DAX lost 2.4% in Europe. Japan’s Nikkei 225 dropped by 2.8%, Hong Kong’s Hang Seng lost 1.5%, and South Korea’s Kospi dropped by 0.8%.
In announcing the tariffs, the Trump administration said in a statement that “foreign trade and economic practices have created a national emergency, and [the president’s] order imposes responsive tariffs to strengthen the international economic position of the United States and protect American workers.”
“Large and persistent annual U.S. goods trade deficits have led to the hollowing out of our manufacturing base; resulted in a lack of incentive to increase advanced domestic manufacturing capacity; undermined critical supply chains; and rendered our defense-industrial base dependent on foreign adversaries,” the statement said.
China was mentioned multiple times in the statement, with the White House saying that the communist-run country’s “non-market policies and practices have given China global dominance in key manufacturing industries” and have led to reductions in U.S. industry and manufacturing.
“Between 2001 and 2018, these practices contributed to the loss of 3.7 million U.S. jobs due to the growth of the U.S.-China trade deficit, displacing workers and undermining American competitiveness while threatening U.S. economic and national security by increasing our reliance on foreign-controlled supply chains for critical industries as well as everyday goods,” it said.
Amid the jitters around the stock market, Vice President JD Vance appeared on “Fox and Friends” and sought to reassure Americans that it will take some time for the tariffs to be felt by everyday consumers.
In the interview, Vance suggested that short-term pain under Trump’s tariffs would lead to long-term economic health. He said the tariffs would make it more difficult to send American jobs to other countries. “We’re fighting as quickly as we can to fix what was left to us, but it’s not going to happen immediately,” he said.
“We cannot keep going down the Joe Biden globalist pathway, where we have $2 trillion of peacetime debt and deficits,” he said. “We have manufacturing disappearing. That is not working for Americans. We’ve got to take this country into consideration.”
Vance added: “Frankly, a lot of people have gotten rich from American jobs moving oversea. But American workers have not gotten rich. And, frankly, American companies have not gotten wealthy from the increasing growth of foreign competitors manufacturing overseas.”
Some companies are already making moves: General Motors will rev up production of light-duty trucks at its assembly plant in Fort Wayne, Indiana, after Trump imposed a 25% tariff on auto imports.
The company announced the move on Thursday in an employee webcast, the day after Trump announced the new tariff plan.
The change is expected to create several hundred temporary jobs at the Fort Wayne plant and could also add overtime days to the schedule.
The White House has shared positive reviews from a range of industry organizations, trade associations, and economists that lauded the president’s tariff plans, and Trump said the financial markets will “boom” once his tariffs are in effect.
Briefly speaking to reporters before heading to Florida to participate in a golf event, Trump stated that as much as $7 trillion will enter the United States, resulting from his reciprocal tariff agenda.
“The markets are going to boom,” he said, adding that “the country is going to boom.”
He said other nations “have taken advantage of us for many, many years.”
The Associated Press, Reuters, Samantha Flom and Andrew Moran contributed to this report.
