Stocks plunged Thursday morning as U.S. trading opened for the first time after President Trump’s announcement of heavy tariffs on nearly every nation exporting products to the United States.
The Dow Jones Industrial Average opened with a loss of more than 1,200 points, falling 2.8 percent on the day. The S&P 500 index opened with a loss of 3.3 percent, and the Nasdaq composite opened with a loss of 4.4 percent.
Trump announced Wednesday he would impose a 10 percent tariff on all imports, with higher rates for key trading partners in response to what the White House considers unfair trade practices. Tariff rates ranged from 20 percent for European Union products to a total tariff of 54 percent on Chinese goods.
“Today’s announcement on reciprocal tariffs was more severe than we had anticipated,” analysts at Nomura wrote in a Wednesday research note.
“Headline rates for targeted countries rose … far beyond our baseline expectation,” they continued. “Details of the announcement included several mitigating factors, but the upside surprise to tariff rates outweighs any positives.”
Stock futures sunk in after-hours trading throughout Trump’s Rose Garden event, which was held Wednesday after the stock market had closed. Asian and European stock markets also sold off throughout the start of Thursday morning, lining up a brutal open for the U.S. market.
Trump, perhaps seeking to get ahead of the day’s story, insisted on Truth Social on Thursday morning that the tariffs would improve the economy.
In all caps, he wrote: “The operation is over! The Patient lived and is healing. The prognosis is that the patient will be far stronger, bigger, better and more resilient than ever before. Make America great again!”
Trump has argued for months that his new tariffs are an essential step toward restoring U.S. manufacturing, making U.S. trade relationships fairer and generating revenue for the government. The president had opposed free-trade deals for decades before he began his political career and had long criticized political leaders who inked such agreements at the expense of U.S. industry.
Trump officials made the rounds on television early Thursday morning to defend the tariffs.
Press secretary Karoline Leavitt called on Wall Street to trust Trump when questioned on CNN about the White House reaction to the global markets and futures taking a hit.
“To anyone on Wall Street this morning, I would say: Trust in President Trump. This is a president who is doubling down on this proven economic formula from his first term,” she said. “It’s the golden rule for the golden age of America, and the United States of America is no longer going to be cheated by foreign nations around the world. And as the president declared yesterday, this is indeed a national emergency.”
Other Trump officials broadly made the case that the tariffs were in response to years of unacceptable trade deficits and losses in manufacturing jobs.
"For 40 years, we’ve had an economy that rewards people who ship American jobs overseas and raises taxes on American workers, and we’re flipping that on its head," Vice President Vance said on "Fox & Friends."
Economists and trade experts, however, expect Trump’s new tariffs to drastically slow economic activity and raise costs for Americans as the president undoes nearly a century of trade ties.
Trump’s “broad-based tariff strategy … will reshape the global trade landscape – marking a return to high-tariff trade policies not seen since the early 1900s,” Gregory Daco, chief economist at EY, wrote in a Wednesday analysis.
Daco also warned that a prolonged financial market meltdown over the tariffs “would exacerbate these shocks and push the U.S. economy into a recession.”
Trump's new tariffs amount to hundreds of billions of dollars in new taxes, which will initially be paid by U.S. businesses and individuals importing goods from abroad. Those costs could be passed through to Americans in the form of higher prices, or force some companies to scale back operations — and employment — because of higher costs.
Billionaire businessman Mark Cuban, a staunch Trump critic, argued Thursday morning that a main issue with the tariff plan is that Trump is relying on big companies rather than entrepreneurs while he is focus on shaking up the U.S. economy.
“The unrecognized failure of the Trump tariffs approach is that he is depending on big global companies to create manufacturing jobs here. He has completely ignored entrepreneurs and innovators,” Cuban said on X.
“Innovators and entrepreneurs will create disruption. Instead of focusing on amplifying what they are doing , he is doing deals with huge companies because he likes big headline numbers This administration needs to realize that entrepreneurs create jobs, big companies cut them.”
Democratic lawmakers have almost universally panned Trump's new tariffs, which they argue will plunge the economy into a recession and hurt working-class Americans as the administration attempts to extend tax cuts.
Sen. Richard Blumenthal (D-Conn.) called the tariffs “probably the most stupid economic step taken by a president in this generation, and I think they will come back to haunt Donald Trump.”
He further described them as "reckless, careless, just plain dumb and also a betrayal of our relationship to Canada.”
While most Republicans have defended Trump's tariffs, some have acknowledged the potential risks the pose to the economy.
"We're in uncharted waters, and I've been listening to everybody make all these bold predictions as if they're clairvoyant — I'm going to say it again. Nobody knows the impact in the short term of these tariffs on the American economy, of the world economy, and I stand by that," Sen. John Kennedy (R-La.) told NewsNation.
Joe Khalil contributed.