The stock market took a dive to start trading Monday as investors brace for President Donald Trump’s promised reciprocal tariffs to “all countries” to take effect this week.
Within the first few minutes of opening Monday, the Dow Jones Industrial Average plummeted 302 points, or .74 percent, while the Nasdaq Composite dipped 320 points, or 1.85 percent.
The stock market tumble comes one day after the president told reporters aboard Air Force One that he’d plan to impose tariffs on “all countries” rather than the countries that have large trade imbalances with the U.S. Imported pharmaceutical drugs, copper and lumber could soon be taxed. These sweeping levies are set to go into effect on Wednesday, which Trump has dubbed “Liberation Day.”
Last week, Trump announced 25 percent tariffs on foreign-made cars that would go into effect this week and will be “permanent.”
“This is the beginning of Liberation Day in America,” Trump said. “We’re going to charge countries for doing business in our country and taking our jobs, taking our wealth, taking a lot of things that they’ve been taking over the years. They’ve taken so much out of our country, friend and foe. And, frankly, friend has been oftentimes much worse than foe.”
In an interview with Meet the Press on Saturday, Trump said he wasn’t concerned about a potential price hike as a result of the tariff: “No, I couldn’t care less, because if the prices on foreign cars go up, they’re going to buy American cars.”
This announcement comes after the president already imposed hefty levies on steel, aluminum and other goods from Canada and Mexico, and increased tariffs on all goods from China. The reinstatement of the tariffs against Mexico and Canada are also anticipated to take effect Wednesday. Canada and China have retaliated with tariffs against U.S. goods in response while the European Union has vowed to not let “unjustified” tariffs on European goods “go unanswered.”
Experts warned that the market could suffer as a result of the tariffs.
“The market is going to have a lot to digest,” Henrietta Treyz, Veda Partners director of economic policy, told Yahoo Finance. “And they’re going to see just how forward-looking and long-term these tariffs are, which is not currently priced in.”
The tariffs on cars are “a bigger deal than the market is making it out to be,” Ajay Rajadhyaksha, global chairman of research at Barclays, told the outlet last week.
“It is a statement of intent,” Rajadhyaksha said. “And at least in my mind, it releases the risk that April 2 is something that markets can’t dismiss. I think we will be negatively surprised.”
