DJI: Dow Jones Blows 650 Points as Trump Sets Off Global Trade War with Tariff Hikes

Nasdaq was the biggest loser, getting served with a tariff slap. Tariff’d partners were quick to hit back, though.

😵 Dow Slides on Tariff Hikes

• The Dow Jones Industrial Average DJI plummeted 650 points, or 1.5%, after Trump confirmed on Monday that the 25% levies on Canada and Mexico will indeed come into effect today. In other words, the global trade wars are now officially on.
• Trump doubled down on China, which will now be paying a total of 20% on imports into the US. These three are America’s biggest trade partners and they’re also figuring out how to retaliate and hurt the US for what it just did to them.
• China was quick to hit back with 15% tariffs on agriculture and restrict exports to 15 US companies. The Asian country also added 10 companies to an unreliable-entity list. Canada matched Trump’s duties with 25% tax charges on about $21 billion worth of US goods.

🚨 Some Reports Flag Worries

• "To the Great Farmers of the United States: Get ready to start making a lot of agricultural products to be sold INSIDE of the United States. Tariffs will go on external products on April 2nd. Have fun!" Trump posted on Truth Social.
• Besides the tariff threat, investors were spooked by the latest reading on US manufacturing, which came in weaker than expected at 50.3 in February against 50.5. The new orders index slumped to 48.6 last month from 55.1 in January.
• Anything above 50 indicates growth, which in February’s case was the first drop under the line after three consecutive months of expansion. Manufacturing in the US has been struggling with 25 months of contraction out of the last 26 months.

🧨 Things Be Droppin’

• Elsewhere, the S&P 500 slipped 1.8% to kick off the trading week and the Nasdaq Composite wiped out 2.7% from its tech-dense valuation. Across the Atlantic, Europe’s broad index Stoxx Europe 600 hit a fresh record high. The UK’s FTSE 100 and Germany’s DAX also hit all-time highs.
• The US dollar moved lower as the tariff outlook darkened prospects for international trade. The EUR/USD pair advanced to $1.0480 and the GBP/USD hit a three-month high of $1.27.
• Bitcoin and other cryptocurrencies shed whatever gains they had made on the announcement of whipping up a strategic crypto reserve. Ethereum dipped below $2,000, hitting a November 2023 low.