US stocks fall on Trump tariff concerns, European defence firms soar

Channel News Asia ^ | 03/04/2025

[SeekAndFind]

WASHINGTON: US stocks closed sharply lower Monday (Mar 3), after President Donald Trump slapped fresh sanctions against China and levies on Mexico and Canada neared imposition, while European defence shares soared as the European Union sought increased military spending over Ukraine.

The White House said Trump had signed an executive order raising tariffs on China to 20 per cent, shortly after Trump seemed to rule out any change to the planned 25 per cent tariffs against Mexico and Canada.

"The tariffs, you know, they're all set, they go into effect tomorrow," Trump said at the White House when a reporter asked whether the levies against the two US trading partners would come into force on Tuesday.

The Dow Jones Industrial Average slipped 1.5 per cent, while the broad-based S&P lost 1.8 per cent, and the tech-rich Nasdaq took a harsher tumble, closing down 2.6 per cent.

The CBOE Volatility Index, or VIX - colloquially known as Wall Street's "fear gauge" - surged, hitting its highest level since December.

But despite the uncertainty, "the backdrop remains a favourable one", Angelo Kourkafas from Edward Jones told AFP.

Monday's trading, he added, was "consistent with the choppiness we have seen over the past three months" in the financial markets.

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Big mistake.

[cowboyusa]

The globalists are having a tantrum. How dare we not play uncle sucker.

[Kleon]

How is it a mistake? This is why I voted for Trump.

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I don’t like government hands in my pockets.

[Jane Long]

What’s the ‘big mistake’?

Please do elaborate.

[central_va]

What is a big mistake?

[central_va]

Tariffs are voluntary taxes. Don't buy, don't pay. Get it?

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You don’t need to wade into economics 101, Milton Friedman, etc. to know that tariffs are stupid.

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There are many side effects.

So there’s that.

[Fuzz]

‘ Tariffs are voluntary taxes. Don’t buy, don’t pay. Get it?’

Don’t buy? I don’t think you get it at all.

[central_va]

Side effects of tariifs:

1. Protecting Domestic Industries: Tariffs can help protect local industries from foreign competition by making imported goods more expensive. This can give domestic companies a better chance to grow and thrive.
2. Generating Government Revenue: Tariffs can be a source of revenue for governments. The money collected from tariffs can be used to fund public services and infrastructure projects.
3. Reducing Trade Deficits: By making imported goods more expensive, tariffs can encourage consumers to buy domestic products, which can help reduce a country's trade deficit.
4. Encouraging Fair Trade Practices: Tariffs can be used as a tool to encourage fair trade practices by penalizing countries that engage in unfair trade practices, such as dumping products at below-market prices or providing excessive subsidies to their industries.
5. Protecting National Security: In some cases, tariffs can be used to protect industries that are vital to national security, such as defense and technology sectors.

[central_va]

I repeat for possible stone based cranial absorption: Tariffs are voluntary taxes, don't buy, don't pay.

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Tariffs “can” do a lot of things.

But they are stupid.

[central_va]

20th century economics doesn't work in a 21st century world. The USA is now a developing nation. A debtor nation. A nation that needs to import durable goods. Thanks to FREE TRAITORS™ we are no longer economically independent of the world.

We are no longer the "arsenal of democracy". We are now the "warehouse of democracy".

[JayGalt]

Yep. This rally will be short lived.

[central_va]

You can either be a free trade globalist or a Patriot BUT YOU CANNOT BE BOTH.

[Fuzz]

You aren’t considering the implications for the entire economy, only your personal finances.

Even if you think you’re safe by not buying avocados should everyone ‘stop buying’ it will crush the economy.

[central_va]

OMG avacados!!!! Quick plant some trees!!! We’re all going to die!!!

[Vision]

Actually it’s a natural, healthy pullback for an overheated market.