President Donald Trump doubled down on his support for tariffs, even as financial markets took a dive on the plans.
“I think it’s going very well. It was an operation like when a patient gets operated on and it’s a big thing,” the president said Thursday afternoon. “The markets are going to boom. The country is going to boom,” he added. “And the rest of the world wants to see is there any way they can make a deal.”
Despite Trump’s optimism, major indexes tanked after he announced plans for country-by-country tariffs, which appear to be based on the size of trade deficits with the U.S. Almost all countries are also facing a 10% minimum tariff.
The Dow Jones Industrial Average shed 1,591 points, or 3.7%, as of 3:30 p.m. ET on Thursday. The S&P 500 is down 263 points, or 4.6%, while the Nasdaq Composite is down 1,027 points, or 5.8%.
The Magnificent 7 stocks were all in the red, as were major stocks across a variety of industries. Dell Technologies (DELL-18.76%) fell more than 18%, United Airlines (UAL-15.55%) plunged than 15%, and Williams-Sonoma (WSM-15.87%) stock declined 16%.
Trump’s announced tariffs — including prior duties, such as those impacting steel and aluminum imports — would raise the effective tariff rate of the U.S. to 18.8%, according to Goldman Sachs (GS-9.14%)’ calculations. Other banks, including Morgan Stanley (MS-9.63%), estimate higher effective rates.
The baseline 10% tariff on all countries will go into effect Saturday at 12:01 a.m. ET; the reciprocal levies are scheduled for enactment on April 9 at 12:01 a.m. ET. New 25% tariffs on foreign vehicle imports went into effect Thursday morning, while vehicle parts will be added by early May.
“What we’ve seen today represents a watershed moment in American trade policy that poses severe downside risks to the global economy,” said John Denton, the secretary general of the International Chamber of Commerce.
As countries move to negotiate ways to mitigate the new U.S. tariffs, several major trading partners plan to return fire.
China, slammed with an average tariff rate of 54%, has vowed to retaliate, while European leaders have condemned the tariffs and are preparing countermeasures.
Later on Thursday, Mexico is set to announce its measures designed to strengthen its position in negotiations. Canadian Prime Minister Mark Carney has announced 25% duties on U.S. cars and trucks, but exempted autoparts.
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