Tariff captivity: how global stock indexes reacted to Trump's tariffs

Global markets reacted to Trump's new tariffs with a significant drop: on April 3, the Japanese index immediately lost 8%, while the European and American ones fell within 5%. However, the potential for a decline is still high — at least by 5-6% in the coming months, experts polled by Izvestia believe. The day before, US President Donald Trump imposed 10% tariffs on all products imported into the country, and for individual countries - China, Vietnam, the European Union — the figure reaches 20-46%. According to the American leader, such fees are twice as low as the current tariffs of these countries against the United States. However, experts believe that these calculations are at least controversial, since they take into account institutional barriers and national standards. Whereas, according to the WTO, fees in these countries are several times lower.

What duties and on which countries did Trump impose on April 2

On April 2, US President Donald Trump announced the imposition of duties on 185 countries, including the uninhabited islands of Heard and McDonald, where only penguins live. Starting from April 5, a mandatory tariff of 10% will be introduced for all goods. It is noteworthy that the new measures do not apply against Russia — as the US government clarified, the reason is that the trade turnover between the Russian Federation and the United States is very small.

During his speech in the Rose Garden of the White House, Trump showed a table with the calculation of tariffs for each individual country. The first column indicated the fees set in these countries and applicable to imports from the United States. The second is the duties imposed by Washington against these states. Based on the table, the US tariffs are twice as low as those imposed on products from the United States.

In particular, Trump imposed the largest tariffs against Vietnam (46%), China (34%), Taiwan (32%), Thailand (36%), and the European Union (20%). The largest figure relates to Cambodia — 49%. They will start operating on April 9th.

At the same time, Trump cited rather complicated and controversial calculations of the percentages of duties imposed against the United States. For example, Trump's table indicates that China's rate level is 67%, while in Europe it has reached 40%, noted Anastasia Priklyova, Associate professor of the Department of International Business at Plekhanov Russian University of Economics. But if we look at the WTO report on tariff profiles of countries for 2024, we will see that the average duties on imports of goods from the United States in China are 4.8% and 4%, and in the EU 7.5% and 3.9%, respectively, she added.

— In his table, Trump takes into account not only import duties, but also institutional barriers and national standards, as well as the difference in VAT values in the partner country and in the United States. The calculation is very controversial, and therefore it is difficult to comment on the validity of the figures," said Yuri Ichkitidze, analyst at Freedom Finance Global.

By the fact that the United States has imposed half the tariffs, Trump wants to show that this is just a retaliatory action by the States. Allegedly, they did not start the trade war, but this is based on very controversial arguments, the expert added.

Trump himself believes that the new duties will not only replenish the budget, but also motivate companies to return their production to the United States.

"Dear Americans, <...> April 2, 2025, will forever be remembered as the day of the rebirth of American industry, the day when America's destiny was returned, and the day when we started making Americans rich again," he said at the event.

How global markets reacted to Trump's tariffs

The global market felt the change the day before. During Donald Trump's speech, futures plummeted, the capitalization of the American market collapsed by $ 1.3 trillion.

On April 3, global markets opened with falling indices. Japan's Nikkei lost 8% in a day. China and India reacted more cautiously, with their main stock indexes falling by less than 1%. In Europe, the drop was more significant. The German DAX and the French CAC 40 lost almost 3% in a day, while the British FTSE 100 lost 1.5%.

American sites also started the day in the red. The S&P 500 lost 4% in early trading, while the Nasdaq lost 5%. The dollar exchange rate against major world currencies also lost 1.5%.

— So far, everything looks like a negative, but still reasonable reaction of the markets to the behavior of the US president. If the world were really on the verge of a trade war between everyone and everyone, then the markets would lose not 1.5–3%, but up to 5% or more," believes Kirill Seleznev, an expert on the Garda Capital stock market.

This spring, it is worth counting on the correction mode on the world's leading platforms, says Oksana Kholodenko, head of the analytics and promotion department at BCS World of Investments. Increased volatility is possible, but the fall is unlikely to be steep. Judging by the behavior of the S&P 500, DAX, and Shanghai Composite indexes, the potential for a decline from today's figures is about 5-6%, she added.

Which companies will be most affected by Trump's tariffs

Among large companies, Apple (-7%) and Nike (-9%) showed the strongest drop in shares. The securities of Adidas and Puma also collapsed by more than 10%, Oksana Kholodenko listed. The fact is that these organizations had factories in Asian countries, against which high duties were imposed, that is, products would become more expensive. Another option for businesses is to transport production to the United States, where labor is more expensive.

Due to the increase in import duties on goods from almost all countries of the world to the United States, Apple products in Russia may rise in price by 20% in the next two to three months, that is, approximately to the European level, predicted Eldar Murtazin, a leading analyst at Mobile Research Group.

Currently, about half of the Apple company's iPhones, computers, and accessories for Russia are purchased in the United States and shipped through third countries, the expert explained. But since this equipment is made in China, it will rise in price by about 20% in the American market, and then the price increase will affect the Russian market, he believes. It is difficult to import Apple directly from China due to logistical problems and difficulties with making payments, he added.

Volkswagen auto giant has already responded to the new measures. Due to the introduction of a 25% tariff, the company temporarily stopped supplying cars from Mexico to the United States. In the future, prices for these cars may rise significantly, Automotive News reported.

What will happen to the global economy after the introduction of US tariffs

The increase in tariffs in the United States implies a loss of 3% of global GDP and an additional 1.7% price increase, which is likely to take place in the next two to three years, says Olga Belenkaya, head of the Macroeconomic Analysis department at Finam. For the European economy, the new duties could reduce exports to the United States by about 50% in the medium term, putting 1.1% of GDP at risk. The countries of the Asian region will also suffer greatly, she believes.

There are several options for the further development of events around duties. The first is the settlement of the conflict between the US and the EU: the transfer of part of the production to the States, independent expert Andrei Barkhota believes. The second scenario is a negative one: the trade war may continue until 2027, and regional military conflicts will begin to distract ordinary citizens.

The third scenario, he said, could be a long-term trade escalation until 2031, when elites tired of inflation and insecurity will form a new world order and new alliances.

The current barriers are the strongest shock in trade, which has not been seen since the adoption of the Smoot—Hawley Law on customs tariffs in 1930 during the Great Depression in the United States, said Evgeny Smirnov, Head of the Department of World Economy and International Economic Relations at the State University of Management (GUU). According to him, now the United States may again find itself on the verge of a similar crisis.

Nevertheless, the current policy of Tampa differs in that in modern conditions the countries are much more connected by international trade than before. If the duties do not motivate companies to move to the United States, while they will provoke inflation and slow down economic growth, the States will have to negotiate with key exporting countries. In any case, the current barriers, the expert added.

Under the current conditions, Russia has more opportunities to establish trade with the countries of Asia, Africa and Latin America, and Trump's tariffs will only encourage our country to expand trade with these regions, believes Evgeny Smirnov. According to him, the more the United States and China fight each other, the more potential benefits Russia can extract for itself — it should be used.