Trump says tariffs ‘going well’ as US markets have WORST day post-Covid

Following Trump’s announcement of tariffs against world economies, US stock markets experienced their worst trading day since the COVID-19 pandemic. The Guardian reports that the three major US indexes lost as much as 6% on 3 April. Meanwhile, a defiant Trump remains confident his policy will work. 

Stocks plummet after Trump’s tariff ‘liberation day’

On 2 April, US President Donald Trump announced sweeping tariffs for countries across the world (including 30% on South Africa). The next day, three of the biggest US stock markets experienced their worst trading days since June 2020, during the COVID-19 pandemic. 

Nasdaq dropped 6%, while the S&P 500 and the Dow lost 4.8% and 3.9%, respectively. Individual companies were hard hit by the Trump administration’s tariff announcement. For instance, Apple, which makes many of its products in China and Taiwan, lost 9%. Sportswear brand Nike, which relies on factories in Asia, was among the hardest hit on the S&P, losing 14% of share value.

The dollar also suffered, losing 2.2% of its value on Thursday morning.

Impact on South Africa’s Markets

The Johannesburg Stock Exchange (JSE), like many other exchanges across the world, was not immune to news from the US. The JSE lost 4.5% at one point on 3 April but steadied to 3.3% by close of business.

South African investors who have invested offshore in US stocks as protection against weaker local growth, will also be impacted by the dismal performance of the US markets.

Regarding the weakened rand, analysts cautioned that it is hard to isolate the impact of Trump’s tariffs from the pressure caused by events in the Government of National Unity.

Defiant Trump confident his tariffs will benefit Americans

Responding to the markets’ dismal performance, The Guardian reports that Trump was unconcerned. “The markets are going to boom,” he said on 3 April. “I think it’s going very well.”

According to BBC News, Trump added, “It was an operation like when a patient gets operated on, and it’s a big thing. I said this would exactly be the way it is.”

A day earlier, at his “liberation day” event to announce and celebrate the new tariffs, Trump was confident the policy would boost the US economy. “This is Liberation Day,” he said, declaring that the day would “forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed.”

However, analysts warn that the tariffs could have the opposite effect. With the US importing everything from food produce to clothes to phones, American consumers are likely to pay more when the tariffs come into effect between 5-9 April.

58% of Americans are against the new tariffs, with business groups also critical of the move. 

Will US stock markets recover from the impact of Trump’s new tariffs?

Let us know by leaving a comment below or send a WhatsApp to 060 011 0211.

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