Global markets tumbled after U.S. president Donald Trump unveiled a sweeping tariff package, declaring it “America’s economic liberation day” in a White House Rose Garden address.
The announcement triggered a broad sell-off in equities and heightened investor concerns about growth, inflation, and the global trade outlook. Analysts said the details from the announcement were worse-than-expected and matched worst-case scenario.
The new measures include a 10% universal tariff on all imports and additional “reciprocal” tariffs of up to 50% on goods from 57 countries. Trump described the move as a long-overdue reset of U.S. trade relationships, promising it would bring back manufacturing jobs and reduce reliance on foreign goods.
“For decades, we’ve been looted, raped, pillaged, and plundered,” Trump said. “These tariffs will make America wealthy again.”
Markets reacted swiftly. The S&P 500 closed the week down more than 10%, while the CBOE Volatility Index printed the second-highest print in over 5 years.
Brent Oil Futures dropped to $66 per barrel, credit spreads widened, and Treasuries rallied sharply as investors priced in a significant growth shock. The US Dollar Index weakened, defying expectations of appreciation under a protective trade regime.
Christian Keller, head of economics research at Barclays (LON:BARC) Investment Bank, said the administration’s actions mark a historic shift in trade policy.
“Our main takeaway from this tariff ‘maths’ is that the Trump administration is intent on re-writing the global trade order, and any justification will do,” Keller said. “In this, it seems set to succeed.”
Barclays estimates the U.S. trade-weighted average tariff will rise to 23%, up 20 percentage points from just two years ago and the highest level since 1909.
