Written by Marin Heusel
While eagerly anticipated worldwide, President Trump’s shocking tariff regulations nonetheless took investors, consumers, and leaders by surprise, leading to dramatic fluctuations within the global stock market and increased consumer unease. Referred to as ‘Liberation Day,’ April 2nd, 2025 marked the first official day in which President Trump’s executive order imposing a minimum 10% tariff on all U.S. imports was implemented on a nationwide scale. Following the implementation of President Trump’s self-proclaimed ‘Liberation Day’ regulations, companies that relied on imported foreign goods are now required to pay a tax as their products arrive at the United States border. Though importers are now forced to pay the tax to the United States government to comply with recent changes, they can choose to pass on some or all of the cost to customers in the form of higher prices (Clarke, 2015). Although several countries such as the United Kingdom, Argentina, Brazil, and Saudi Arabia will face a 10% tariff on all imports, others such as China (54% tariff) and Cambodia (49% tariff) will face more aggressive numbers as per President Trump’s order. Despite the seemingly negative implications on American consumers and importers, President Trump continues to argue that the implementation of tariffs presents the potential to boost the American economy as consumers will be more likely to ‘buy American-made goods, increas[ing] the amount of tax raised and lead[ing] to huge levels of investment in the country’ (Clarke, 2025).
As the effects of President Trump’s ‘Liberation Day’ announcement arose across the United States, the negative consequences on the United States stock market materialized almost instantly. Stocks immediately fell as several investors anticipated a potential trade war following the tariff announcement, and critical market indexes continued to drop significantly in the days following. Expecting significantly less aggressive rates, Trump’s ‘Liberation Day’ regulations took several investors by surprise, with some noting that recent tariffs could potentially drive many countries into a recession. Further, ‘the global stock market has lost trillions in value since Trump announced sweeping new 10% import taxes on goods from every country’ (Sherman, 2025). Moreover, in retaliation against the significantly inflated tariffs imposed on the country, China’s Finance Ministry announced a 34% tariff on all goods imported from the United States (Bao, 2025). As both the Trump administration and China’s Finance Ministry continue to refuse to decrease tariff rates, the two countries are brought even closer to the brink of a trade war; additionally, each leader continues to impose alternating retaliatory conditions on the other. On the condition that China’s Finance Ministry refuses to withdraw the 34% tariff imposed on the United States, President Trump has proposed an additional 50% tariff on United States imports from China. Addressing the growing risk of a United States-China trade war, senior economist at the Economist Intelligence Unit Tianchen Xu states that, ‘Beijing might resort to further retaliatory measures, such as stopping purchases of U.S. agricultural goods, matching U.S. tariffs, and further expansion of export controls on metals and minerals’ (Bao, 2025).
Though the effects of President Trump’s newly imposed policies were experienced on a global scale, the aftershocks on a national scale were equally catastrophic. Utilized as a standard of measure regarding the overall direction of the economy, the S&P 500 stock index encompasses 500 of the largest companies in the United States, including Apple, Microsoft, and Amazon. As the Trump administration tariffs came into play, the market fluctuations of the S&P 500 were heavily analyzed as a means of understanding the overall direction of the United States economy. Following the Trump administration’s announcement, the S&P 500 lost $5.83 trillion in market value, marking its ‘steepest four days of losses since the index was created in the 1950s’ (Carew, Chauhan, 2025). Moreover, ‘if the U.S. [considered] implement[ing] sustained taxes on exports similar to those that have been recently proposed, it would likely cut S&P 500 Index earnings per share by 2-3%’ (“How tariffs are forecast to affect U.S. stocks”, 2025). Additionally, ‘every five-percentage-point increase in the U.S. tariff rate is estimated to reduce S&P 500 earnings per share by roughly 1-2%’ (Kostin, 2025). Increased attentiveness of the S&P 500 as well as general market behavior following the Trump administration’s tariff announcement has led many investors to share negative speculations and opinions regarding the efficacy and future benefits of the regulations. Further, opposition towards the influx of a new set of potential tariffs cements the dissenting, shared views of investors across the nation.
Going forward, concerns regarding a potential trade war between the United States and China continue to worry investors nationwide. Though President Trump postponed several of his tariffs by 90 days, the administration neglected to include China on that list. Additionally, since President Trump’s inauguration, the total imposed tariff rates on Chinese goods have reached an alarming rate of 145%, adding to investor and consumer unease. On a national scale, the ‘loss of China as an export market will deal a particularly hard economic blow to agricultural workers,’ and will likely put a significant number of farmers out of business (Swanson, Nelson, Rennison, 2025). Further, as the wide-ranging effects of the Trump administration’s tariffs continue to play out, vigilant observance of the United States market fluctuations and the resulting impact on consumers and investors alike has continued to play a large role in public opinion globally.
‘Liberation Day’ marked an unprecedented stream of market fluctuations, panic, and uncertainty, leading to increased awareness and unease globally. Moreover, the aggressive tariffs proposed by the Trump administration shocked investors and consumers alike, leading to an immediate drop in several key market indicators, such as the S&P 500. Further, escalating tensions between the United States and China opened the door for increased unease concerning a future U.S.-China trade war as well as the promise of future market implications and costly impacts on U.S. consumers. Though the future of President Trump’s tariff regulations is uncertain, the effects on the U.S. stock market continue to directly correlate with frequent changes in administration policy, giving rise to uncertainty within the domain of U.S. consumer practices and general market behavior.
References
Bao, A. (2025, April 9). China says it will “fight to the end” after Trump threatens 50% additional tariffs. CNBC. https://www.cnbc.com/2025/04/08/china-resolutely-opposes-trumps-50percent-tariff-threat-vows-retaliation.html
Clarke, J. (2025, April 8). What are tariffs, how do they work and why is trump using them?. BBC News. https://www.bbc.com/news/articles/cn93e12rypgo
How tariffs are forecast to affect us stocks. Goldman Sachs. (2025, February 7). https://www.goldmansachs.com/insights/articles/how-tariffs-are-forecast-to-affect-us-stocks
Stocks Dive Again as Angst Rises Over Trump’s Trade War- The New York Times. (2025, April 10). https://www.nytimes.com/live/2025/04/10/business/trump-tariffs-stocks
S&P 500 hits lowest close in almost a year as hopes wane for tariff concessions | Reuters. (n.d.). https://www.reuters.com/markets/us/futures-rise-after-heavy-losses-hopes-talks-over-tariffs-2025-04-08
Sherman, N. (2025, April 4). Trump tariffs: Worst Week for us stocks since Covid Crash as China retaliates. BBC News. https://www.bbc.com/news/articles/cx26v8x24w1o
Stock market images: Free photos, PNG Stickers, wallpapers & backgrounds. rawpixel. (n.d.).https://www.rawpixel.com/search/stock%20market