Dow falls 200 points after Trump threatens unilateral tariffs
The Dow Jones Industrial Average dropped 230 points, or 0.54%, to 42,634.95 after the bell. The S&P 500 slid 0.28%, while the Nasdaq dipped 0.24%.
The small-cap Russell 2000 also declined, losing 0.38%.
3 President Donald Trump said he plans to unilaterally impose tariffs on dozens of trading partners, reviving concerns about a global trade war and sending a jolt through financial markets.
Shutterstock
Meanwhile, the CBOE Volatility Index (VIX), Wall Street's 'fear gauge,' spiked more than 5%, signaling rising investor unease.
The market downturn came hours after Trump, speaking Wednesday evening at the John F. Kennedy Center for the Performing Arts in Washington, confirmed that his administration intends to send letters to US trade partners in the coming weeks to formally establish new tariff terms.
'We're going to be sending letters out in about a week and a half, two weeks, to countries, telling them what the deal is,' Trump said.
'At a certain point, we're just going to send letters out. And I think you understand that, saying this is the deal, you can take it or leave it.'
Trump's remarks come ahead of a July 9 deadline, when the White House is expected to move forward with increased tariffs on a wide range of imports unless new trade agreements are secured.
3 Dow Jones Industrial Average futures were down 302 points, or 0.70%, at 42,606.00 before the opening bell on Thursday. The S&P 500 futures slipped 37.25 points, or 0.62%.
AP
The president has previously floated similar timeframes, sometimes delaying or altering plans, but Thursday's selloff suggests investors are bracing for concrete action.
In April, Trump proposed across-the-board tariff hikes but put them on hold for 90 days following a steep market decline. Since then, the administration has finalized only a narrow trade framework with the United Kingdom and a temporary tariff truce with China.
That truce is now under pressure. Officials from Washington and Beijing met in London earlier this week for high-stakes negotiations after each side accused the other of breaching terms.
Trump said Thursday that the US–China framework would include rare earth and magnet exports from China, in exchange for the US loosening restrictions on Chinese student visas.
3 In April, Trump proposed across-the-board tariff hikes but put them on hold for 90 days following a steep market decline.
JOHN G MABANGLO/EPA-EFE/Shutterstock
When asked whether he might extend the July 9 deadline to allow more time for deals, Trump said, 'But I don't think we're gonna have that necessity.'
Trump has shifted his strategy away from blanket multilateral negotiations and is now focused on bilateral deals with countries such as India, Japan, South Korea and members of the European Union.
Still, Commerce Secretary Howard Lutnick noted Thursday that negotiations with the EU have been difficult, pointing to the complexity of dealing with a 27-nation bloc. 'It's frustrating,' he said.
With Trump reaffirming his tariff plans and few trade deals finalized, Thursday's sharp losses suggest markets are now pricing in the real possibility of a broader economic confrontation in the weeks ahead.
The Post has sought comment from the White House.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time Magazine
33 minutes ago
- Time Magazine
What to Know About ‘Transshipping' and U.S. Trade Deals
A U.S. and Vietnam trade deal has been reached that means Vietnam will avoid the most severe tariff rates—set to go back up next week—but there's a catch that could anger Vietnam's largest trading partner, China. The deal, announced Wednesday, will mean Vietnamese exports to the U.S. are tariffed at a 20% rate—lower than the initial 46% 'reciprocal' tariff announced in April, but double the 10% universal tariff. Goods that are deemed to be transshipped, however, will be tariffed at a 40% rate—a policy that seems aimed at China which has used the method to get around U.S. levies. Transshipping involves transferring cargo from one vessel to another while in transit to the destination country and is often done to disguise a product's country-of-origin in order to illegally skirt import levies. In return, Vietnam agreed to drop all tariffs on U.S. imports, President Donald Trump said. 'In other words, they will 'OPEN THEIR MARKET TO THE UNITED STATES,' meaning that, we will be able to sell our product into Vietnam at ZERO Tariff,' the President posted on Truth Social on Wednesday morning. At the heart of Trump's deal with Vietnam—and his talks with other major trading partners—has been an effort to counter what he sees as China's unfair trade practices. Trump's trade adviser Peter Navarro called Vietnam 'essentially a colony of communist China' in an April interview on Fox News while describing how nontariff barriers, including Chinese transshipments, contribute to U.S. trade deficits. 'Vietnam sells us $15 for every $1 that we sell them and about $5 of that is just Chinese product that comes into Vietnam, they slap a 'Made in Vietnam' label on it and they send it here to evade the tariffs,' he said. The higher tier of tariffs on transshipments will impact goods that have components originating in one country, such as China, but are routed through Vietnam then exported to the U.S. China supplies much of the components and raw materials to Vietnam and other Asian countries that are then used to make finished goods, but it also ships some finished goods through Vietnam or mostly finished goods that go through a minimal final assembly in Vietnam with their county-of-origin misrepresented as Vietnam, which is considered illegal. But restrictions on transshipments could tick off China, which is a larger trading partner for most Asian countries than the U.S. Here's what to know about what the deal means for Vietnam and China. What does the deal mean for Vietnam? Vietnam has been keen to be on Trump's good side since he announced his 'reciprocal' tariffs in April. Vietnam was the sixth-largest importer to the U.S. last year, supplying almost $137 billion worth of goods and fuelling a $124 billion trade surplus with the U.S.—the third largest trade gap with the U.S. after China and Mexico. The country's share of imports to the U.S. was bolstered during Trump's first term, when trade tensions with China pushed firms to move production to Southeast Asia. Vietnamese officials have been in talks with the Trump Administration for weeks and even signed deals to purchase more American goods ahead of Thursday's trade agreement. The country has promised to buy more aircraft, liquefied natural gas, and agricultural products from the U.S. Vietnamese officials have also backed the Trump Organization's plans for a $1.5 billion luxury resort and golf club development outside Hanoi. Vietnam's agreement, according to Trump, to remove all levies on U.S. imports is indicative of the country's push to maintain close trading ties with the U.S., even as Trump has retreated from the relationship in other areas, such as through the shuttering of USAID. Trump boasted that the zero tariffs will drive sales of American SUVs in Vietnam, although an American-made car, even with no duties, may still be more expensive than cars produced elsewhere, and it's not clear how much domestic demand there is for American cars. Vietnam also pledged to crack down on fraud and illegal transshipments even before the deal was cut. Thailand, South Korea and Taiwan have also implemented or stepped up similar measures since April. The U.S.-Vietnam deal, however, does not currently address industry-specific tariffs, including a 25% tariff on cars and auto parts and a 50% tariff on steel and aluminium, that are subject to pending Commerce Department investigations. It could also still dampen Vietnam's economy: Bloomberg Economics estimates that Vietnam could lose a quarter of its exports to the U.S. in the medium term under the deal, affecting more than 2% of its annual economic output. How does China use transshipments? The higher tariff on transshipments indirectly targets Chinese exports. China has routed its goods through other countries, including Vietnam, to bypass U.S. import levies, a practice that became more frequent during the U.S.-China trade war in Trump's first term. Earlier this year, ahead of Trump's tariffs in April, Chinese exports to Vietnam and Thailand rose sharply, which Brookings analysts suggest is unlikely to reflect a rise in domestic demand in those countries and is instead more likely to reflect transshipments to the U.S. Chinese shipments to Southeast Asian rerouting hubs like Vietnam, Malaysia, Indonesia and Thailand, also surged shortly before trade talks between China and the U.S. in May even as direct exports from China to the U.S. fell—suggesting that China was able to continue its flow of goods to the U.S. through transshipments even as countries touted crackdowns. It's too soon to tell how effective the transshipment clause and other measures will be in cracking down on fraud. 'While the exact criteria for defining transshipment remain unclear, it is evident that Vietnam's role as a potential connector for Chinese exports to the U.S. will diminish,' Su Yue, Principal China Economist at the Economist Intelligence Unit, told the South China Morning Post. But some experts say at least some businesses may be willing to take the gamble, especially if the benefit of manufacturing in China outweighs the risk of getting caught. 'The thing about trade is when there are huge arbitrage opportunities, people are going to find a way to take advantage of them, legally or illegally,' Caroline Freund, an expert on international trade at the University of California at San Diego, told the Washington Post in May. 'It's like a river. You can keep putting rocks in, but the water's going to keep flowing down.' Ash Monga, who runs China-based supply chain management company IMEX Sourcing Services, tells TIME that in the wake of Trump's tariffs, he noticed a rise in Chinese companies offering 'Delivered Duty Paid' fraud services to U.S. importers, which involves underpricing goods in order to pay a lower duty. Suppliers in China would set up shell companies that would act as the 'importer of record,' creating the perception among U.S. importers of lower risk. (Monga cautions that U.S. customs can still go after the U.S. businesses purchasing the goods from China and it can carry severe penalties.) 'They are doing it because people are looking for solutions to lower the tariff,' Monga says. 'Businesses were at risk of not surviving so they were desperate to find any solution' even if those solutions are fraudulent. China sees move as attack on interests 'The looming question now is how China will respond,' Bloomberg Economics analyst Rana Sajedi wrote in a research note. 'Beijing has made clear that it would respond to deals that came at the expense of Chinese interests and the decision to agree to a higher tariff on goods deemed to be 'transshipped' through Vietnam may fall in that category.' China vowed that it will retaliate if its interests are hurt by the U.S.-Vietnam trade deal. 'We are happy to see all parties resolve trade conflicts with the U.S. through equal negotiations but firmly oppose any party striking a deal at the expense of China's interests,' Chinese Commerce Ministry spokesperson He Yongqian said at a Thursday press conference, reiterating earlier comments warning countries against signing deals with the U.S. that shut out China. 'If such a situation arises, China will firmly strike back to protect its own legitimate rights and interests.' On top of that, China will likely view the relatively lower 20% tariff on Vietnamese goods as an effort to encourage firms to produce their goods in Vietnam over China. The U.S. and China said they reached a framework agreement in June that will set U.S. tariffs on Chinese imports at 55% and Chinese tariffs on U.S. imports at 10%, alongside other export controls. 'The 'China quotient' in U.S. negotiations with other Asian economies is arguably evident in the deal with Vietnam,' Vishnu Varathan, macro research head for Asia at Mizuho, wrote in a Thursday note. 'The U.S.'s intent is quite obviously to not disincentivize Vietnam's role as a substitute for China at a lower 20% tariff.' Vietnam may soon find itself caught in a balancing act between two economic superpowers. Varathan wrote: 'Other Asian economies will be particularly vulnerable to a two-sided geoeconomic squeeze given that their reliance on both China and U.S. are significant.' And some experts suggest that the U.S. wants to go beyond stopping illegal transshipments—it wants to shut China out of global supply chains entirely. The U.S. has also been in talks with India that could involve an agreement requiring a higher minimum amount of a product's value to be added locally in order to qualify as 'Made in India'—the U.S. is asking for that amount to be 60%, while India wants to bring it down to around 35%. The U.K. also signed a trade deal with the U.S. in June that included commitments around export controls that could encourage British firms to exclude Chinese products from their supply chains. China's foreign ministry criticized the move, telling the Financial Times: 'Co-operation between states should not be conducted against or to the detriment of the interests of third parties.' 'The United States seems to be arguing that anything that comes from China is by default transshipment, so you tar and feather every single product that comes from China,' Deborah Elms, the head of trade policy at Asia-based global trade research organization, the Hinrich Foundation, told the New York Times. 'Asian governments are being asked to redefine supply chains to something that might be decades in the making in exchange for what? It's a little unclear.'
Newsweek
33 minutes ago
- Newsweek
Is the Stock Market Open on Fourth of July? What to Know
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. As Americans celebrate Independence Day with fireworks and parades, many businesses and services will alter their hours or close altogether for the Fourth of July. Is the Stock Market Closed Today? As is standard practice, U.S. stock markets will be closed on Friday in observance of Independence Day. The New York Stock Exchange and Nasdaq closed early on Thursday and will remain closed on Friday. Investors should also note that the U.S. bond market closed early on Thursday and will remain closed on July 4, per the Securities Industry and Financial Markets Association. After returning to normal hours Monday, Wall Street's schedule will remain unchanged until September, when markets close for Labor Day. What Else Will Be Closed on the Fourth of July? Most federal, state, and local government offices will remain closed for the holiday. This includes post offices, so regular mail delivery USPS will be paused, and priority mail will be the only service in operation. FedEx and UPS will also suspend their delivery services, although some urgent shipments—through FedEx Custom Critical and UPS Express Critical—will still be available. UPS and FedEx office locations will be closed or have modified hours, and customers are encouraged to check with their local branches regarding availability. Wall Street sign hangs next to the New York Stock Exchange on Monday, June 30, 2025, in New York. Wall Street sign hangs next to the New York Stock Exchange on Monday, June 30, 2025, in New York. Yuki Iwamura/AP Photo Banks including Bank of America, Wells Fargo and Capital One will be closed as well, though ATMs and digital banking will remain in service. Public libraries, courts, as well as many city and town offices will also shut their doors for the holiday. Will Shops Stay Open? Many retailers and grocery stores will remain open on the Fourth of July, though some may operate on different hours. Major retailers, stores and restaurant chains including Walmart, Starbucks and McDonald's confirmed to USA Today that they will still be serving customers during the holiday. Target, Home Depot and Lowe's also confirmed that they would be operating at regular hours on Friday. However, Costco has announced on its website that all of its warehouse locations will be closed for the Fourth of July. CVS will remain open, though some locations will operate on holiday schedules. Most Walgreens locations are expected to stay open as usual, though operating hours may vary by location. What Happens Next To mark the 250th anniversary of the country's founding next year, President Donald Trump has already kicked off a yearlong series of celebrations with a parade in Iowa. Earlier this year, the president created a specialized "Task Force" to "to plan, organize, and execute" the celebrations that will mark the occasion.
Yahoo
34 minutes ago
- Yahoo
AeroVironment, Inc. (AVAV): I Helped The Shares A Lot, Believes Jim Cramer
We recently published . AeroVironment, Inc. (NASDAQ:AVAV) is one of the stocks Jim Cramer recently discussed. AeroVironment, Inc. (NASDAQ:AVAV) is an American defense contractor known primarily for its presence in the high-growth drone industry. The recent conflict in the Middle East, South East Asia, and Russia's invasion of Ukraine have demonstrated the importance of drones in today's warfare. AeroVironment, Inc. (NASDAQ:AVAV)'s shares have gained 61% year-to-date primarily on the back of a massive 47% jump in June after the firm's latest earnings report beat analyst estimates by a wide margin. However, since the peak, AeroVironment, Inc. (NASDAQ:AVAV)'s shares have dipped by 11.4% after the firm decided to take advantage of its recent share price hike to pay off debt. Cramer commented on the share price rise: 'Last week on Stop Trading, I said people should buy AeroVironment, I had them on. . .and AeroVironment was at 180, and now AeroVironent's at 295. A rocket on its way to the sky, representing the power of the company's unmanned aircraft systems. Earlier, Cramer discussed some of the reasons behind the fresh market enthusiasm about AeroVironment, Inc. (NASDAQ:AVAV): 'Okay, AeroVironmnent, I think a lot people were worried about how much, you know, do they have drones, are they out of drones, who's got the drones, the cost of drones.' While we acknowledge the potential of AVAV as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
