Trump's tariffs backfire, sending U.S. stock market into tailspin
Washington, D.C. — President Trump’s sweeping new tariff policy, has sent shockwaves through global markets and triggered a steep decline in the U.S. stock market—raising alarms among economists, investors, and global allies alike.
The tariffs, which include a blanket 10% levy on all imports and up to 60% on Chinese goods, were pitched by Trump as a bold move to “rebuild American industry and end global exploitation.” But just weeks after their announcement, the reality on Wall Street has been far less triumphant.
The Dow Jones Industrial Average plunged nearly 1,700 points on April 3, marking its worst day since 2020, with tech, automotive, and manufacturing stocks leading the retreat. The S&P 500 fell 4.84%, and the NASDAQ dropped nearly 6%, entering correction territory—a stark turnaround from the bull run of the past year.
“The market’s reaction isn’t just volatility—it’s fear,” said Alicia Berrigan, senior economist at the Brookings Institution. “Investors are pricing in higher costs, slower growth, and a possible trade war that could spiral out of control.”
The tariffs have already sparked retaliation from key trading partners. On March 10, China announced new duties, including a 15% tariff on American soybeans and semiconductors.
For American businesses that rely on global supply chains, the impact has been swift and brutal. Ford and General Motors both issued warnings about rising input costs and delayed production. Apple Inc., already under pressure from regulatory scrutiny, saw its shares tumble more than 9% in early April.
Trump has long championed tariffs as a remedy for what he calls “unfair trade practices,” particularly by China. Yet many economists argue the policy is economically regressive, acting as a tax on American consumers and businesses rather than a boost to domestic production.
“The idea that you can isolate the American economy from the world and thrive is a dangerous illusion,” said Mark Zandi, chief economist at Moody’s Analytics. “These tariffs are a blunt instrument that’s creating more pain than progress.”
Indeed, the Consumer Price Index (CPI) ticked higher in March, driven in part by rising prices on imported goods—from electronics to basic household items. Retailers like Walmart and Target have warned of further price hikes in the months ahead.
Cracks are emerging within the Republican party. Several Senate Republicans, including Mitt Romney and Lisa Murkowski, have publicly criticized the tariffs as “economically reckless.”
Even traditional allies in the business community, once stalwart backers of Trump-era deregulation, are expressing concern.
“This is not the pro-growth agenda we signed up for,” said a statement from the U.S. Chamber of Commerce. “Tariffs are taxes. And American families will pay the price.”
Markets are bracing for continued instability, and some analysts warn that if retaliatory tariffs escalate or consumer spending falters, the country could face a mild recession by early 2026.
For now, investors and economists alike are left watching the screens—and the headlines—hoping that political ideology doesn’t override economic reality.
