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Fau, that’s been a week.
Most people expected things to get worse before they could get better. But we haven’t called this the bottom yet.
This is a high-level summary just in case you’ve been offline for the past few days or simply avoided checking your securities account.
President Trump announced this week that he wiped out 10% global tariffs on all imports and announced higher taxes in 60 countries.
These high tariffs range from 11% to 50%. Countries facing the highest tariffs include Cambodia (49%), Vietnam (46%), China (34%) and India (27%). You can find the complete list here.
His team calculated mutual tariffs based on what they call the “total amount of all unfair trade practices” per country. The White House formula is: The country’s trade deficit was divided into 0.5 multiplied by exports to the US.
Mathematics has proven to be controversial. Critics say that if the method focuses solely on the country’s trade deficit with the US, it does not take into account (1) the actual tariff rates of products, and (2) the non-tariff trade barriers. The White House admitted that there is no perfect formula, but that’s the best they can do.
The Trump administration also argues that mutual tariffs are still less than what other countries charge for US imports, and that these policies are the first step to bring manufacturing back onshore.
For impact:
Stocks are tanked, cryptos fall, M&A deals are planned, IPOs collapse, other countries are shocked.
The Dow Jones Industrial Average on Thursday, the first day of the transaction after the announcement, lost 1,679.39 points. Yesterday, the S&P 500 fell almost 5%, falling more than 12% a year. US stocks have lost more than $3 billion in market value, the worst day since 2020.
Fed Chairman Jerome Powell on Friday made no indication that interest rate cuts would come anytime soon. “The economy is still in a good place,” he said from an event in Virginia. However, he added that central bankers are paying attention to tariffs.
Yesterday I wrote that the IPO window would be closed. Today, Bloomberg reported that StubHub, Klarna Bank and MNTN have suspended all of their IPO plans. Private equity company KKR&Co. is no longer considering purchasing German packaging producer Gerresheimer.
Today, the stock extended its sale, with VIX reaching a staggering level of 44 shyness, well above its 20-day moving average of 21. A continuous decline will occur as China announced a mutual tariff on US goods of 34% from April 10th.
