When Donald Trump "paused" his plans to apply tariffs yesterday, Wall Street rallied and almost recovered the sharp losses incurred by the president's planned trade war with planet Earth. A day on, however, and reality is sinking in: he's doubling down on tariffs on China, there's no telling what he might do next, and likely has no idea what he's doing—so it could be anything. The numbers are going down again.
One day after a historic relief rally, a steep sell-off resumed on Wall Street.
The Dow tumbled more than 2,000 points, or 5% Thursday midday. The broader S&P 500 sank 5.9% and the tech-heavy Nasdaq Composite slid 6.9%.
While investors breathed a sigh of relief yesterday as President Donald Trump announced a 90-day pause on most "reciprocal" tariffs, he hiked the tariff rate on China to at least 145% — a level the White House clarified today. The prospects of a trade war with China has continued to spook investors.
The tariffs as they now appear to stand—who knows?—will cost middle-class households $3,400 a year according to one analysis.
The hit to the average household would be even higher than to the middle-income, totaling $4,400 per year, The Budget Lab found. After adjusting for product substitutions away from China and other nations, the average consumer would get hit by $2,600 in losses per year, the analysis found.
Lower-income Americans will get hit harder by the tariffs as a share of their total income, according to the analysis.
Economists warn the US economy will likely slow significantly due to the trade war.
Previously:
• Coincidence? Unusual options activity before Trump's tariff reversal
• Trump finally gets his big boy parade
• Trump's 'Have fun!' may ring hollow to farmers
