On April 2, 2025, U.S. President Donald Trump declared a national emergency, citing the United States’ substantial and persistent trade deficits as a threat to national economic security.
Invoking the International Emergency Economic Powers Act (IEEPA), he announced the implementation of a universal 10% tariff on all imported goods, effective April 5, 2025. In addition to this baseline tariff, the administration introduced “reciprocal” tariffs targeting approximately 60 countries with higher rates, purportedly reflecting the trade barriers these nations imposed on U.S. products. Notable among these were a 34% tariff on Chinese imports (augmenting existing duties to an effective rate of 54%), 20% on European Union goods, 24% on Japanese products, and 46% on Vietnamese imports. These measures were framed as an effort to rectify perceived trade imbalances and protect American industries.
The immediate aftermath of these announcements saw a precipitous decline in global financial markets. On April 3, 2025, the Dow Jones Industrial Average plummeted over 1,600 points, marking one of its most significant single-day point drops. The S&P 500 and Nasdaq Composite also experienced substantial losses, declining by 4.8% and 6%, respectively. This sharp downturn was driven by investor concerns over escalating trade tensions and the potential for a global trade war.
The situation further deteriorated on April 4, 2025, when China announced retaliatory measures, imposing a 34% tariff on U.S. imports and restricting exports of rare earth materials critical to various industries. This escalation exacerbated market anxieties, leading to another day of significant losses. The Dow Jones Industrial Average fell by approximately 2,200 points (5.5%), bringing its two-day decline to nearly 4,000 points. The S&P 500 dropped 6%, erasing $2.7 trillion in market value and marking its largest one-day slump since March 2020. The Nasdaq Composite declined by 5.8%, entering bear market territory with a cumulative drop exceeding 20% from its recent high.
The cumulative impact over these two days resulted in an unprecedented erosion of market value. The S&P 500 alone saw a reduction of approximately $5 trillion, while the overall U.S. stock market experienced a contraction nearing $11 trillion since the announcement of the tariffs. This represents the most substantial two-day loss in the history of U.S. financial markets.
Economists and financial analysts expressed deep concern regarding the broader economic implications of these developments. Federal Reserve Chair Jerome Powell cautioned that the tariffs would likely lead to increased inflation and a slowdown in economic growth. Analysts from various financial institutions warned that the tariffs could significantly harm the U.S. technology sector, potentially setting back innovation and competitiveness by a decade.
The international response was swift and varied. China’s retaliatory tariffs and export restrictions were among the most pronounced, directly impacting key U.S. industries. Other nations, including members of the European Union, indicated intentions to pursue countermeasures, raising the specter of a prolonged and expansive trade conflict. Former UK Prime Minister Tony Blair advised against retaliatory actions, emphasizing the potential for escalating economic harm.
In the face of mounting criticism and market turmoil, President Trump remained steadfast in his position. He characterized the implementation of tariffs as an “economic revolution,” urging Americans to “hang tough” and asserting that these measures were essential to restoring jobs and achieving fair trade.
Gros News 
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