US markets, dollar slip on Trump tariffs

The Wall Street Journal reported the US market had $2.7 trillion in market cap by noon. At the same point in the day, the Dow industrials had fallen 1300 points, or 3.1 per cent, the tech-heavy Nasdaq slipped 4.8 per cent.

President Trump on Wednesday announced sweeping tariffs on imports from more than 100 countries. There is a baseline rate of 10 per cent with higher, country-specific rates on dozens of trading partner countries, including India (26 per cent), China (34 per cent) and the EU (20 per cent).

Others hit with higher rates under the reciprocal tariffs were the UK (10 per cent), Japan, South Korea, Indonesia, Taiwan, the EU, Vietnam, Cambodia, Switzerland, Bangladesh, Pakistan and Sri Lanka.

Many of the targeted countries are treaty allies of the US, the President said, adding friends have been more unfair to the US on matters of trade than foes.

He also reiterated his long-running beef with countries with high trade surpluses with the US or those that he has perceived as levying high import duties on American goods.

Canada and Mexico are exempted from the reciprocal tariffs, but imports from these countries are already under a 25 per cent levy that was announced by Trump earlier to force them to stop the flow of illegal migrants and fentanyl, a deadly opioid, through their borders into the US.

The reciprocal tariffs are the fourth in a series of such measures undertaken by President Trump in his bid to cut America’s trade deficit, counter restrictive trade practices and force manufacturers to come to the US.

In the first round, he had reimposed a tariff of 25 per cent on steel and aluminum imports from his first term (raising the levy on aluminum from 15 per cent).

He had followed it up with tariffs on Canada, Mexico and China (as a country of source for precursor chemicals for fentanyl. Then came the 25 per cent levy on imported automobiles and auto parts. He next plans to tariff pharmaceuticals.