Stock markets in the U.S. and abroad are crashing on news that U.S. President Donald Trump plans to impose tariffs of at least 10% on goods from most other countries, heightening concerns of a global trade war.
In premarket trading, the blue-chip Dow Jones Industrial Average is down more than 1,000 points while the benchmark S&P 500 is down 3.40%.
The technology-laden Nasdaq index is down 755 points or nearly 4% on news that Trump plans to impose a 34% tariff on China where many electronics and components are made.
Outside the U.S., stocks are also crashing on the tariff news.
Japanese markets led losses in Asia, with the benchmark Nikkei 225 index falling 2.77% to 34,735.93.
Mainland China’s CSI 300 index fell 0.59% to end April 3 at 3,861.50, while Hong Kong’s Hang Seng Index declined 1.52% to 22,849.81.
Europe’s Stoxx 600 index opened down 1.6% on April 3 as traders assessed the scope and impact of U.S. tariffs. Banks on the index were down 3.2% while technology stocks fell 2.6%.
In the U.S., stocks of companies that manufacture products overseas are getting particularly hard hit, with shares of Nike (NKE) and Apple (AAPL) falling 9% and 7%, respectively.
The Gap (GAP), which makes a lot of its clothing in Asia dropped 9% on news that Trump slapped a 46% tariff on Vietnam.
Tesla (TSLA), which manufactures its vehicles in China, is down 4% and Nvidia (NVDA), which sources its microchips from Taiwan is down 3%. Trump hit Taiwan with a 32% tariff.
The White House unveiled a baseline tariff rate of 10% on all countries that goes into effect April 5. Bigger duties, such as against the European Union at 20%, will be charged in coming days.
Analysts and commentators say markets are spooked by the fact that the tariff rates are much higher than expected and likely to raise inflation and push the U.S. economy into a recession.
Canada was not hit with additional tariffs over and above what the Trump administration had already announced, though many Canadian products are exempt under existing trade deals.
However, Trump did confirm a 25% duty on all foreign automobiles and said that duties on foreign auto parts are coming on May 3 of this year.