President Donald Trump’s sweeping new tariffs triggered a sharp sell-off in global markets on Thursday, marking the worst day on Wall Street since the early pandemic days of 2020. The move, aimed at reshaping U.S. trade relations, has rattled investors, businesses, and governments around the world, stoking fears of a deepening economic slowdown.
The Nasdaq plunged nearly 6%, dragged down by heavy losses from Apple, Google, and Nvidia. The S&P 500 fell 4.8% — its biggest one-day drop since summer 2020 — while the Dow Jones Industrial Average closed almost 4% lower. Markets in Asia and Europe also declined, though some recovered by day’s end.
At the center of the turmoil: a sweeping package of tariffs introduced by Trump, including a 10% blanket tax on all imports starting Saturday, a 25% duty on imported vehicles that began Thursday at midnight, and targeted levies of up to 50% on goods from select countries starting April 9. Analysts at J.P. Morgan called it the largest U.S. tax increase since 1968, with costs expected to run into the hundreds of billions this year alone.
Economists warn the aggressive tariff strategy could tip the U.S. into recession. Wilmington Trust’s chief economist, Luke Tilley, now places the odds of a downturn at 50%, up from 40% earlier in the week. “If these tariffs stay in place for three months, there’ll be a recession,” Tilley said. “That’s one of the easiest calls I’ve had to make in 25 years.”
The private sector is already bracing for impact. Stellantis, maker of Jeep, laid off 900 workers in Michigan and Indiana and halted production at some facilities in Canada and Mexico, citing uncertainty over the long-term effects of the tariffs.
Trump, meanwhile, remained unfazed by the market reaction. “The patient was very sick,” he told reporters on Air Force One. “The operation is over. And now we let it settle in.” He framed the tariffs as a necessary correction for what he sees as a fundamentally broken trade system.
But the announcement has left America’s allies stunned. Australian Prime Minister Anthony Albanese, whose country was hit with a 10% duty, called the decision “unprincipled” and damaging to long-standing partnerships. European Commission President Ursula von der Leyen, responding to a 20% tariff on EU goods, warned that Europe is ready to retaliate if negotiations fail.
China, the primary target of many of the new tariffs, has yet to formally respond but is expected to introduce countermeasures soon. The country ran a nearly $1 trillion trade surplus with the U.S. last year, making it a key focus of Trump’s latest trade offensive.
Despite calls for calm from the U.S. Treasury, world leaders are bracing for escalation. As the tariffs take effect, the global economy may be entering a new period of uncertainty — and confrontation.
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