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Art of the Tariff

Wall Street had hoped for answers. Trump gave them more than they could stomach.

Markets recoiled in overnight trading after the president unveiled a sweeping set of levies against scores of countries, swinging his tariff hammer hard enough to dent global stocks and rattle the existing world order.  

Trump’s tariff agenda didn’t liberate investors from uncertainty so much as deepen it. 

Each of the major US indexes tumbled in after-hours trading. Retail names like Walmart, Nike, Target and Dollar Tree turned sharply lower, while tech names like Apple and Nvidia also fell. 

The new two-step tariff regime imposes a blanket 10% levy on all imports starting April 5, followed by country-specific rates kicking in April 9, according to the White House.

China, for one, faces a 34% levy on top of the existing tariffs of 20% Trump imposed in February and March, bringing total duties to 54%. 

“I call this ‘kind reciprocal’ not full reciprocal,” Trump said, alluding to how other countries still charge the US higher tariffs than the US does to them.

“If you want your tariff rate to be zero, then you build your product right here in America.”

Late Wednesday, CNBC reported that European Commission president Ursula von der Leyen said her team was preparing counter measures against the newly announced tariffs of 20% on the European bloc.

“The silver lining for investors could be that this is only a starting point for negotiations with other countries and ultimately tariff rates will come down across the board,” said Chris Zaccarelli, chief investment officer for Northlight Asset Management.

“But for now traders are shooting first and asking questions later.”

For corporate America, the implications go beyond quarterly earnings. Trump’s tariffs threaten to unwind global supply chains decades in the making.

Even if companies rush to pledge US investment and announce reshoring plans, it’s not a flip-the-switch affair. It’s slow and expensive — which could hit margins and confidence.

Still, the administration’s record on economic policy has been anything but linear. In the opening months of Trump 2.0, decisions have been walked back or reworked within days. 

Opening with an aggressive stance on tariffs is textbook Art of the Deal, after all.

Mark Haefele, chief investment officer of UBS Global Wealth Management, expects Trump to soften the terms eventually. 

“The President himself invited negotiations,” Haefele said. “Treasury Secretary Bessent said in a Bloomberg interview that the announced tariffs are the ‘high end of the number’ and that countries could take steps to bring tariffs down.”

Indeed, Bloomberg reported late Wednesday Thailand’s prime minister was prepared to negotiate tariffs and had plans to talk with US leadership.

One obvious takeaway is that Trump’s America will not be one to entertain skirmishes over minerals or chips.

This is a wholesale reshuffling of global trade, launched via executive order and underpinned by a long-standing belief that the world has taken advantage of the US. 

As Trump insists he’s leveling the playing field, markets continue to dip and reposition. Defensive flows are already underway — tech and consumer stocks have sold off, while cash, bonds and volatility hedges have steadied.

And with the new tariff deadline inching closer, one question lingers:

If this is what “liberation” looks like, what does a trade war look like?

Market snapshot

Elsewhere:

📈 Tesla stock jumped Wednesday despite posting a 13% drop in first-quarter vehicle sales compared to a year ago. The update comes two days after the stock logged its worst quarter since 2022. (CNBC)

⏳️ Fed Governor Adriana Kugler said disinflation is slowing. She said the recent rise of inflation expectations has followed the slowdown: “The latest data indicate that progress toward the Federal Open Market Committee’s 2% goal may have stalled.” (Reuters)

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About me:

📰 I’m Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.

I write our flagship newsletter to prepare you for each trading day, unpacking markets, economic data and Wall Street with analysis you won’t find anywhere else. Feedback? Reply to this email, ping me on X @philrosenn, or write me directly at phil@openingbellmedia.com.