Wall Street shuddered as President Trump announced sweeping tariffs on countries across the globe on Wednesday, with the administration unveiling higher taxes on imports than investors had expected, weighing on markets around the world.
Futures on the S&P 500, which allow investors to trade the index outside normal trading hours, slumped 1.6 percent, while global stock benchmarks also came under pressure. Futures on the Japanese Nikkei 225 index fell 2 percent ahead of the Asian markets opening.
The slide came after Mr. Trump held up a table listing broad tariffs to be levied on imports from different countries, including a 34 percent tax on Chinese imports, 20 percent on goods coming from the European Union and a 24 percent tariff on Japanese imports.
The initial market reaction suggested that the scale of the tariffs on Wednesday had come as a surprise, and analysts were still trying to figure out how the figures had been derived. Shortly after the announcement, some analysts remained confused about the numbers quoted by the administration.
“I think the numbers are shockingly high compared to what people were expecting and it is inexplicable in many ways,” said Peter Tchir, head of macro strategy at Academy Securities. “I think it’s a disaster.”
Others concluded that the high levels were the starting point for further negotiations.
“Eye-watering tariffs on a country-by-country basis scream ‘negotiation tactic,’ which will keep markets on edge for the foreseeable future,” said Adam Hetts, global head of multi-asset at Janus Henderson Investors. “Fortunately, this means there’s substantial room for lower tariffs from here.”