The markets in Europe and Asia fell after the announcement of the global tariffs

The U.S. Import Trade War after the White House: Donald Trump tries to build an economic barrier between the United States and other countries

The abrupt drop in US stock markets on Wednesday came as a result of the President’s decision to impose a series of tariffs.

Around midday Thursday, the Dow Jones Industrial Average had tumbled over 1,200 points, or 3%. The S&P 500 dropped 4% and the tech-heavy Nasdaq index went down 5%.

After the U.S. market closed, Trump declared a 10% baseline tax on imports from all countries and higher tariff rates on dozens of nations that run trade surpluses with the United States. The chart that the president held up at the White House showed the tax the United States would charge on imports from China, the European Union, and Taiwan.

The economists warn that the new taxes will result in higher prices and slower growth of the United States, which will lead to a domino effect of decline in other countries.

The tariffs amount to a nearly nine-fold increase in the prevailing U.S. import tax last year. The size and scope of the levies, announced after the U.S. stock market closed on Wednesday, took many investors by surprise.

“If the rate of tariffs is kept at 5% for a period of time, you can throw out most forecasts for the foreseeable future,” said Sonola in his research note.

Just as Donald Trump tried to build a wall against immigration, he’s trying to build an economic barrier between the United States and other countries.

“We’re going to produce the cars and ships, chips, airplanes, minerals and medicines that we need right here in America,” Trump said Wednesday in the White House Rose Garden. If they don’t return to us, they’ll have to pay a big tax.

But while domestic manufacturers are supposed to be the beneficiaries of the trade war, many factories are bracing for higher costs and a loss of export markets. They have promised to retaliate with tariffs of their own.

“Here it comes and we’re already seeing that,” said Tim Fiore, who conducts a monthly survey of factory managers for the Institute for Supply Management. It’s going to be really ugly when it comes to the retaliatory tariffs. It is going to kill demand.

The U.S. launched a similar, worldwide trade war in the 1930s. It did not end well. It is thought that the tariffs worsened the Great Depression.

“Higher prices was bad for consumers, because they’d have to spend more,” says the former Treasury Secretary. It was bad for producers because it meant higher input costs. And it was bad for peace, because it undermined comity among nations.”

Economists say Trump’s new tariffs are even more draconian, hitting even products the U.S. is unable to produce domestically, such as coffee and bananas.

Stock and equilibria markets in Asia and Europe fell following U.S. announcement of global tariffs — a major shock

The yield on the 10-year Treasury fell as low as 4.11% in the morning from 4.17% late Tuesday and from roughly 4.80% early this year. But it later rose to 4.18%. Higher yields can show higher expectations for the economy.

The price of U.S. benchmark crude fell by $2.63 to $69.08 a barrel in early Thursday dealings. Brent crude, the international standard, gave up $2.62 to $72.33 per barrel.

The S&P 500 rebounded from an earlier loss of 1.1% to rise 0.7% in the late going. It’s had a pattern this week of opening with sharp drops only to finish the day higher.

Bangkok’s SET shed 1.1% after Thailand was assigned at 36% tariff on its exports to the U.S. That could cause Thai exports to fall by $7 billion to $8 billion, or about 2.3% of the total, Kasem Prunratanamala of CGS International said in a report.

The announcement came as a “major shock,” Yeap Junrong of IG said in a commentary. “China, in particular, was hit with an additional 34% tariff, bringing its total tariff burden to 64% when accounting for previous measures.”

Source: Markets in Asia and Europe fall following U.S. announcement of global tariffs

Deriving U.S. Central Bank Interest Rates from the epoch of Lower Boundary Wall Street and RHIC

Despite the central bank raising interest rates, the potential impact of tariffs on the japanese economy dashed expectations that the central bank would continue to raise interest rates. The Financial Group skidded 8%.

The future for the S&P 500 dropped 3.1% while that for the Dow Jones Industrial Average lost 2.6%, auguring potential losses when U.S. markets reopen on Thursday.