Wall Street stocks cratered and global leaders condemned President Trump’s new tariffs Thursday as “brutal and unfounded” as the White House stood behind its plan to tax imports across the board.
The stock market had its worst day since 2020. The Dow Jones Industrial Average plummeted and never recovered Thursday, closing down 1,679 points, or nearly 4%. The S&P 500 finished down 4.8%, and the Nasdaq ended the day at nearly 6% lower.
French President Emmanuel Macron urged European nations to work together to fight the tariffs and companies to pause investments in the U.S.
“The American economy and Americans will come out weaker and poorer,” he said.
Congressional lawmakers floated legislation to reclaim power over tariffs from the executive branch, and companies with extensive supply chains in hard-hit Vietnam and other Asian countries watched their stocks tick downward.
The Trump administration waved off the backlash, saying it had Main Street and blue-collar workers in mind when it imposed a 10% baseline tariff on all imports and higher, reciprocal levies on dozens of nations that impose expensive levies or other barriers on imported U.S. goods.
SEE ALSO: Markets nosedive as investors digest Trump tariff plan; Dow drops 1,200 points
Mr. Trump said market turmoil was “expected” and likened the economy to a sick patient that is recovering.
“It went through an operation,” he said on Air Force One en route to Florida. “It’s going to be a booming economy. It’s going to be amazing. We’re going to have trillions coming in.”
Mr. Trump predicted a boom in manufacturing as companies set up shop within the U.S., particularly once he issues tariffs on semiconductors and pharmaceuticals.
“We’ll be announcing that sometime in the near future. It’s under review right now,” he said.
Tariffs on cars that aren’t made in the U.S. went into effect, although copper, pharmaceuticals, semiconductors, lumber articles, certain critical minerals and energy products were exempted from the plan.
“This is a big change. I’m not going to shy away from it, but we needed a big change,” Vice President J.D. Vance told “Fox & Friends.”
Responding to the fear of price shocks, Mr. Vance said Mr. Trump is correcting a “globalist” economy that prioritizes elites and other nations over American workers whose manufacturing jobs have dried up.
“You don’t fix that stuff overnight,” the vice president said. “We know people are struggling. We’re fighting as quickly as we can to fix what was left to us, but it’s not going to happen immediately.”
Agriculture Secretary Brooke Rollins told White House reporters that there “will be a short time of uncertainty, and then we’ll move back to the prosperity that this president has envisioned.”
Online sleuths questioned the underpinnings of the tariff rates. They said the numbers appeared to be calculated by examining trade imbalances between the U.S. and other nations, not the tariff amounts or trade barriers imposed by those nations.
Tariffs are taxes or duties paid by importers on goods from foreign markets. Mr. Trump said tariffs are a great way to force companies to return to America or keep their operations in the U.S., employ American workers and create revenue to fund domestic programs.
Foreign countries don’t pay the tariffs directly to the U.S. Treasury. In many cases, U.S. companies pay the levies, and they might pass on at least some of the costs to consumers through higher prices.
Global trading partners unpacked the tariff news with shock, confusion and indignation.
“To me, the U.S. President’s tariff decision is fundamentally wrong. This is a lose-lose situation for both — us and the United States,” German Chancellor Olaf Scholz said on X. “Germany and Europe stand for free trade, and we will defend our interests.”
The plan hits Asian countries particularly hard. China faces a 34% tariff, and Vietnam is listed at 46%. Other rates include Japan at 24%, South Korea at 25%, India at 26% and Taiwan at 32%.
Companies such as Nike, with a large manufacturing base in Vietnam, will face headwinds. Chinese goods will face a combined 54% tariff because Mr. Trump added 20% levies earlier in his term.
Japanese Prime Minister Shigeru Ishiba said tariffs will have “a big negative impact on bilateral economic ties, the global economy and the multilateral trade system.” He said he “would not hesitate” to approach Mr. Trump in person.
Using language outspoken by Japanese standards, Mr. Ishiba said the tariffs were “extremely unfortunate” and “against our wish.”
Japanese media reported that Tokyo officials hadn’t ruled out retaliation.
Calling tariffs “very grave,” acting South Korean President Han Duck-soo chaired an emergency meeting in Seoul with his finance and industry ministers and demanded that the government use “all its capabilities” to “overcome this trade crisis.”
Canada and Mexico were exempted from the new tariffs but were subject to Mr. Trump’s tariffs on steel, aluminum and cars. Goods not covered by the U.S.-Mexico-Canada Agreement will be subject to a 25% tariff based on Mr. Trump’s emergency order regarding fentanyl trafficking.
Some analysts say Mr. Trump is using tariffs to coerce nations to reduce their tariffs or trade barriers against U.S. producers.
“That’s the beauty of what we do. We put ourselves in the driver’s seat. If we would have asked these countries to do us a favor, they would have said no,” Mr. Trump said. “Now they will do anything for us.”
Commerce Secretary Howard Lutnick, speaking on CNBC, said the administration isn’t looking to grant exemptions. He said the policy is a long-overdue restructuring of global trade to ensure fairness. At the same time, he said other countries might reexamine how they approach U.S. producers.
“I expect most countries to start to really examine their trade policy toward the United States of America and stop picking on us,” he said. “Stop saying that we can’t sell our corn to India. Stop saying that we can’t sell our beef anywhere. Just stop treating us so poorly.”
On Capitol Hill, lawmakers responded with bipartisan legislation reasserting Congress’ role over tariff authority.
The Trade Review Act of 2025, sponsored by Sens. Charles E. Grassley, Iowa Republican, and Maria Cantwell, Washington Democrat, would require Congress to pass a joint resolution of approval on new tariffs within 60 days. Otherwise, the levies would expire.
Sen. Bernie Moreno, Ohio Republican, said Mr. Trump is reversing “failed policies and fighting back for American workers.” Sen. Tim Sheehy, Montana Republican, said it is “about time we have a level playing field for businesses.”
Other Republicans struggled to defend the policy. Sen. Mitch McConnell, Kentucky Republican, said trade wars would hurt working people the most.
“At a time when Americans are tightening their belts, we would do well to avoid policies that heap on the pain,” he wrote on social media. “We ought to strengthen our friendships abroad and reinforce our allies as pillars of American prosperity and security.”
In the meantime, Capitol Hill Democrats are questioning the ultimate goal of Mr. Trump’s latest tariffs.
“On one side, Donald Trump has hit Americans with a massive tax hike through his extremely dumb tariffs. On the other side, Senate Republicans are getting ready to take away vital programs, throw people off Medicaid, all so they can give massive tax breaks to billionaires,” said Senate Minority Leader Charles E. Schumer, New York Democrat. “It’s a brutal Republican pincer move, with American families trapped in the middle.”
Sen. Christopher Murphy, Connecticut Democrat, said Mr. Trump’s plan should not be viewed in economic terms at all. He said it amounts to a political tool to win loyalty from industrial sectors.
“Independent industry has power. The tariffs are Trump’s tool to erode that independence,” Mr. Murphy wrote on X. “Now, one by one, every industry or company will need to pledge loyalty to Trump in order to get sanctions relief.”
Industries signaled they were skittish about the fallout but were careful not to criticize the administration directly.
The American Apparel & Footwear Association warned that competing tariffs could snowball “into a growing, and potentially crushing, burden on American businesses and hardworking American families.”
“It is vital that our government’s actions be aligned so that they benefit both the crucial exports of American-grown and American-manufactured goods as well as U.S. imports of safe, affordable and innovative consumer products,” AAFA CEO Steve Lamar said.
The National Council of Textile Organizations commended Mr. Trump for preserving duty-free trade on goods covered by the U.S.-Mexico-Canada Agreement he negotiated in his first term and for closing the de minimis loophole that let Chinese producers send low-value packages straight to U.S. consumers.
“This loophole facilitates 4 million shipments a day to the United States that often hide illegal and unethically made products, unsafe goods and illicit fentanyl and other narcotics that reach our doorsteps,” NCTO CEO Kim Glas said. “Countries such as China currently avoid billions in U.S. duties through the use of de minimis to the United States.”
• Andrew Salmon contributed to this report.
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
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