Markets Dive After Trump Slaps New Tariffs on Dozens of Countries

CNA

3 days ago

LONDON: Stock markets slid Friday (Aug 1) after US President Donald Trump announced tariffs on dozens of trading partners and weak US jobs data fuelled the fall.
Wall Street's Dow Jones index dropped more than 1.2 per cent as trading got underway in New York, while Paris and Frankfurt tumbled more than two per cent. The dollar gave up earlier gains against key currencies.
With hours to go before Trump's Aug 1 deadline for governments to make toll-averting deals, the president unveiled a list of sweeping levies.
The new tariffs range from 10 to 41 per cent and target exports from 69 countries, including Canada, India, Switzerland, Brazil and Taiwan. Trump's administration said the measures, effective Aug 7, would raise the US effective tariff rate to about 18 per cent, up from just 2.3 per cent last year.
Hours later, the US Labor Department said the US economy added just 73,000 jobs in July while revising lower the figures for May and June.
"The US payrolls data has eclipsed news about the latest tariff rates applied to the world's economies by Donald Trump, and is now dominating markets," said Kathleen Brooks, research director at XTB trading group.
Earlier, she noted, tariffs were "the main theme sucking risk sentiment from financial markets".
Governments around the world have been scrambling to cut deals with the White House since Trump unveiled his bombshell "Liberation Day" tariffs on Apr 2.
He has delayed implementation of the tariffs several times - the latest move pushing them back by a week to Aug 7.
MARKETS SLIDE WORLDWIDE
US stocks were deep in the red Friday afternoon, with the Dow Jones Industrial Average down 1.46 per cent to 43,486.45, the S&P 500 losing 1.8 per cent to 6,225.55, and the Nasdaq falling 2.42 per cent to 20,610.91. Global equities followed suit, with Europe's STOXX 600 tumbling 1.89 per cent.
SWITZERLAND, CANADA TARIFF HIT
Some trading partners have reached deals with the United States - including Britain, the European Union, Japan and South Korea.
China remains in talks with Washington to extend a fragile truce in place since May.
For those in the crosshairs of the latest outburst, tariff rates range from 10 per cent to 41 per cent.
Trump unveiled new levies Thursday on about 70 economies - including a blistering 35 per cent rate on Canada - as he seeks to reshape global trade to benefit the US economy.
The Swiss government on Friday said it would negotiate with the United States to try to avoid the 39 per cent tariff that could hit key industries.
Switzerland's mechanical and electrical engineering sector said it was "stunned" by the tariffs and would push for a negotiated solution.
Canadian Prime Minister Mark Carney criticised the US move, vowing to protect Canadian jobs and diversify exports. Ottawa warned it may walk away from talks if no progress is made.
India is also negotiating with Washington after being hit with a 25 per cent tariff that could affect US$40 billion worth of its exports, according to a government source.
Other countries such as Brazil (50 per cent), Taiwan (20 per cent) and South Africa (30 per cent) were also affected. Southeast Asian economies, meanwhile, saw lower-than-expected rates of around 19 per cent, easing investor concerns.
Shares in European pharmaceutical firms meanwhile slumped following the president's threat to punish them if they did not lower prices for medicines in the United States.
Meanwhile, businesses like L'Oreal and other fashion and cosmetics firms are reportedly exploring use of the "First Sale" customs clause to soften the impact of the tariffs.
Tariffs uncertainty overshadowed earnings from major tech titans this week that saw Apple on Thursday post double-digit quarterly revenue growth that beat expectations.
Amazon said quarterly profits jumped 35 per cent as key major investments in AI technology paid off, though its outlook for the next three months disappointed.