ZURICH and WASHINGTON. Global stock markets plunged on Friday after U.S. President Donald Trump imposed a new wave of steep tariffs on exports from dozens of trading partners, prompting widespread concern among governments and companies and triggering a fresh round of trade negotiations.
Switzerland, shocked by a 39 percent tariff on its goods, and India, hit with a 25 percent rate, were among the countries calling for further talks. The new tariffs also include a 35 percent duty on many goods from Canada, 50 percent for Brazil, and 20 percent for Taiwan, which said its rate was temporary and expected to be lowered.
A presidential order listed import duty increases ranging from 10 to 41 percent, scheduled to take effect in one week. These will raise the U.S. effective tariff rate to about 18 percent, up from just 2.3 percent last year, according to Capital Economics analysts.
U.S. stocks tumbled in response. The Dow Jones Industrial Average closed down 1.23 percent at 43,588.58, the S&P 500 dropped 1.6 percent to 6,238.01, and the Nasdaq Composite fell 2.24 percent to 20,650.13. European markets were also affected, with the STOXX 600 index sliding 1.89 percent.
Investors were further rattled by a disappointing U.S. jobs report, which showed slower job growth in July and sharply revised data from the previous month. President Trump responded by ordering the dismissal of Labor Statistics Commissioner Erika McEntarfer and claimed, without providing evidence, that the figures were manipulated.
The White House said the new tariffs are essential for gaining leverage in trade talks and for restructuring what it considers unfair global trade relationships. “The uncertainty with respect to tariffs was critical to getting the leverage that we needed,” said Council of Economic Advisers Chair Stephen Miran on CNBC.
Despite a framework deal reached last week, the European Union said Trump’s latest orders failed to include agreed carve-outs for autos and aircraft. Concerns also grew over the administration’s plan to implement transshipment restrictions that could lead to 40 percent tariffs on products believed to originate from higher-tariffed countries like China.
Meanwhile, the Commerce Department reported rising consumer prices, with home furnishings and durable household goods increasing 1.3 percent in June, the highest monthly gain since March 2022.
Some countries are hopeful negotiations will lower tariff rates. Switzerland is pushing for a negotiated solution, calling the tariffs a massive shock to its export industry. South Africa, facing a 30 percent tariff, is seeking “practical interventions” to protect jobs and economic stability.
Southeast Asian nations welcomed lower-than-expected tariff rates, averaging about 19 percent, which Thailand’s finance minister said would help preserve competitiveness and encourage growth. Australia retained a lower minimum tariff rate of 10 percent, a move that Trade Minister Don Farrell said could help local exporters.
However, economists warned that the overall impact of the tariff hikes will be negative for the global economy. “There are no real winners in trade conflicts,” said Thomas Rupf of VP Bank Singapore. “The tariffs hurt the Americans and they hurt us,” added German winemaker Johannes Selbach.
European companies like L’Oreal are now exploring loopholes such as the decades-old U.S. “First Sale” rule, which allows companies to base duties on the product’s factory price rather than the final retail price, to mitigate losses.
Trump has invoked emergency powers and pressured foreign leaders to accept revised trade terms. In a separate order targeting Canada, the president raised tariffs on certain goods from 25 to 35 percent, citing the country’s alleged failure to cooperate in curbing fentanyl smuggling into the U.S.
At the same time, Mexico was granted a 90-day reprieve from new tariffs to allow for broader trade negotiations. Canadian Prime Minister Mark Carney expressed disappointment and pledged to defend Canadian jobs and diversify exports.
India is also in talks with the U.S. after the new tariffs threaten around $40 billion of its exports, an Indian official said.
