Global Markets Dip as New Tariffs are Imposed
MANILA, Philippines (AP) — Stocks around the world fell sharply on Friday following President Donald Trump’s announcement of new import tariffs that will take effect on August 7.
The U.S. futures dropped by 0.9% after Trump revealed that tariffs could reach as high as 41% for imports from several countries. Notably, tariffs for goods imported from Canada will increase to 35% starting Friday.
As investors prepared for key U.S. payroll data set to be released later in the day, the announcement added further uncertainty to an already volatile situation since Trump assumed office in January.
Stephen Brown from Capital Economics noted that this is still an ongoing situation, suggesting that this might not be the final outcome. He mentioned there’s a possibility that some countries might negotiate different agreements with the U.S., and there’s a chance the tariffs could be challenged in U.S. courts.
In early trading in Europe, Germany’s DAX index dropped by 1.8% to 23,630.99, while Britain’s FTSE 100 fell 0.6% to 9,081.99. The CAC 40 in Paris saw a decline of 2.1%, closing at 7,608.60.
Futures for the S&P 500 and Dow Jones Industrial Average were also down by 1%.
Asian markets experienced similar declines, with South Korea’s Kospi plummeting 3.9% to 3,119.41, largely due to a 3.5% dip in shares of Samsung Electronics. Japan’s Nikkei 225 fell by 0.7% to 40,799.60, amid concerns about agreed tariffs on exports to the U.S.
Hong Kong’s Hang Seng index decreased by 1.1% to 24,507.81, while the Shanghai Composite index dropped 0.4% to 3,559.95. The status of trade talks between China and the U.S. remains uncertain, and these discussions are separate from Trump’s recent tariff announcement.
In Australia, the S&P ASX 200 fell by 0.9% to 8,662. Meanwhile, India’s BSE Sensex declined by 0.7% to 80,837.19, and Taiwan’s TAIEX decreased by 0.5% to 23,434.38.
Commenting on the tariff changes, Stephen Innes of SPI Asset Management highlighted that the new tariff structure sets a minimum rate of 10% for most trading partners, with additional charges of 15% or more for surplus nations, placing particular emphasis on Canada.
“This isn’t just a minor adjustment; it represents a major shift. The average tariff in the U.S. has jumped from 2.3% to 15.2%, fundamentally altering costs across various sectors,” Innes explained.
Wall Street also faced more losses on Thursday, with a late fade in the earlier tech rally and a downturn in healthcare stocks leading to a decline. The S&P 500 fell 0.4%, marking its third consecutive drop, while the Dow Jones slipped by 0.7%, and the Nasdaq composite closed down slightly by less than 0.1%.
Around 70% of S&P 500 stocks fell, with the healthcare sector being the biggest contributor to the downturn. This sector sank after the White House issued letters urging major pharmaceutical companies to reduce prices, prompting significant drops in stocks like Eli Lilly & Co. and UnitedHealth Group.
In early trading on Friday, U.S. benchmark crude oil slipped by 70 cents to $68.56 per barrel, while Brent crude fell by 69 cents to $71.01 per barrel.
The U.S. dollar weakened slightly against the Japanese yen, dropping to 150.30, while the euro rose to $1.1418 from $1.1417.
