Confusion and falling stocks according to Trump's new punitive tariffs

Confusion and falling stocks according to Trump's new punitive tariffs

Nitle relief was accompanied by the hard reality on Friday that President Donald Trump is far from finished with his chaotic tariff regime. In statements to journalists from the Oval Office, Trump announced that he would announce new so -called "mutual tariffs" next week. This could fulfill an election promise and express the long wish to adapt the import taxes of foreign countries one to one to restore what the president considers to be in international trade.

effects on the financial markets

This announcement shook the financial markets on Friday after the stocks were relatively quiet the previous week. Although Trump's 10% comprehensive tariffs came into force on Tuesday and China reacted to the United States with its own expanded tariffs, the markets rose slightly this week, which was due to the relief that Trump was postponed to all from Mexico and Canada until March 1st.

market reactions and economic consequences

The announcement of new, potential tariffs that could affect all corners of the world unsettled investors. The Dow Jones Industrial Average fell by 400 points or 0.9%. The wider S&P 500 also fell by 0.9%, while the technology -oriented NASDAQ Composite Index followed by 1.4%. Trump explained that mutual tariffs would ensure that "we are treated immediately like other countries" and could help reduce the US budget deficit.

consumers and the possible consequences of customs increases

tariffs are a central element of Trump's promise to increase income in order to finance the extension of its tax relief from 2017 as well as other promised tax relief. However, the tariffs themselves could be an enormous increase in tax for American consumers, which according to economists ultimately bear the costs of tariffs. If Trump enforces the 25% tariffs on Mexico and Canada, the direct costs of import taxes on Chinese, Mexican and Canadian goods could be over $ 1,200 a year, as researchers from the Peterson Institute found. This would be the greatest tax increase in the United States since at least 1993.

the uncertainty about the tariffs

It is unclear what form the mutual tariffs will accept if they are actually implemented. Trump had recently threatened a general 10%customs on all imports to the United States. The threat of mutual tariffs seems to be returning to a frequent campaign motto: the import taxes of foreign countries are dollar way to reduce the US trade deficits.

Danger of a trade war

If Trump drives the mutual tariffs forward, this could trigger a number of retaliation tariffs from affected countries. This could ignite a trade war that leads to ever higher taxes, which ultimately affect consumers who, according to economists, usually pay the invoice in the end. This is because American importers pay the tariffs - not the foreign countries affected by the tariffs. These importers pass on the costs to retailers, which typically increase consumer prices.

situation report on customs policy

The 10% inches on China were worth around $ 427 billion. This already exceeds the various tariffs, which Trump imposed on around $ 380 billion of foreign goods during his first term, according to tax foundation. However, the Trump administration delayed some of these tariffs on Friday and temporarily restored the so-called de minimis exception, a loophole that enables packages worth less than $ 800 to get into the country.

unexplained status of customs regulations

The exemption came into force on Tuesday, and the US Postal Service immediately stopped all package deliveries from China and Hong Kong to meet the arrangement. But shortly afterwards, USPS set up the service within hours, which led to confusion about how articles from China would be inspected to determine their import taxes. Trump signed an executive on Friday that restores the de Minimis exception until the time at which "sufficient systems are available in order to process the collection of customs fees in the Ministry of Commerce completely and quickly". However, the decree does not mention how long the delay will take, which is another example of the uncertainty about the implementation and the scope of potential tariffs that may soon be due.

The reporting was carried out by CNN employees Matt Egan, Elisabeth Buchwald and Ramishah Maruf.