US stock market futures plunged on Sunday evening after the new US tariff policy began collecting duties over the weekend and global trade tensions continued to rise.
President Trump and his top advisers dug in over the weekend, with the president suggesting that equity markets may need to “take medicine” and posting that the new tariffs are “already in effect, and a beautiful thing to behold.”
Earlier on Sunday, administration officials defended President Trump’s plans across networks.
Commerce Secretary Howard Lutnick asserted that the tariffs “are definitely going to stay in place for days and weeks.” Treasury Secretary Scott Bessent said he did not expect a recession spurred by the tariffs, and top economic adviser Kevin Hassett insisted that Trump was not purposely trying to tank the stock market after the president reposted a video that claimed he was.
On April 2, Trump announced a blanket 10% tariff on all goods coming into the US. He also added new duties on goods from 185 countries, which the president described as the “worst offenders” in terms of perceived unfairness on trade, slated to kick in on April 9.
American customs officials began collecting the new 10% tariff on imports from many countries on Saturday morning after the US stock market saw its worst week since 2020. US futures dropped at the open on Sunday evening while bitcoin, seen as a proxy for risk, sold off.
Various countries are still deciding how to respond (or not), and companies have begun adjusting to the new reality — largely by raising prices. Some countries responded with new tariffs of their own: Canada announced new duties on certain vehicles imported from the US, and China announced that it will impose countermeasures against the US starting April 10, including a 34% tariff on US goods.
The European Union is reportedly preparing an initial set of countermeasures. The tariff rate applied to the 27-nation bloc of EU countries under the policy is 20%, and about 70% of the EU’s exports to the US are covered. Trump adviser and Tesla CEO Elon Musk, appearing at an event on Saturday, said that “Europe and the United States should move, ideally, in my view, to a zero-tariff situation.”
“This is the single biggest trade action of our lifetime,” Kelly Ann Shaw, a trade lawyer and former White House trade adviser during Trump’s first term, told Reuters.
Here are the latest updates as the policy reverberates around the world.
LIVE439 updates
Trump says sometimes you have to ‘take medicine’ as markets crater again
Speaking to reporters aboard Air Force One on Sunday, President Trump said sometimes you have to “take medicine” when asked about the market’s recent sell-off, according to Reuters.
“I don’t want anything to go down, but sometimes you have to take medicine to fix something,” Trump said.
The president added that his policies were not intentionally trying to engineer a market sell-off.
Trump’s comments come as markets appeared set to begin the week where they left off Friday, with US stock futures down sharply across the board with Nasdaq 100 futures off more than 4% and futures tied to the Dow and S&P 500 both off more than 3.4%.
Last week, the Nasdaq closed in a bear market and the S&P 500’s losses reached 17% from the benchmark index’s record high hit back in February.
This weekend, Trump’s economic surrogates attempted to make clear in media appearances that the president’s shock tariff announcements last week were not a negotiation tactic.
Speaking Sunday evening, the president said no deal on tariffs with China would be forthcoming unless the US’ trade deficit with China was fixed. The US trade deficit with China reached $295 billion last year.
Trump added that he has spoken to leaders in Europe and Asia regarding his tariffs unveiled last week.
Trump calls tariff policy “a beautiful thing to behold.”
After US stock market futures plunged on Sunday evening, President Trump posted:
US stock futures tank as tariff rout restarts
US stock futures plunged Sunday evening, setting up Wall Street for another bruising day on Monday as markets braced for more fallout from President Trump’s fast-moving tariff policy.
Futures tied to the S&P 500 (ES=F) plummeted around 4%, while those on the tech-heavy Nasdaq (NQ=F) lost 4.3%. Dow Jones Industrial Average futures (YM=F) sank 3.7%.
Goldman warns on China stock market as tariffs kick in
Goldman Sachs’ chief China equity strategist Kinger Lau published a cautious take on China’s stock market in a new note.
“China equity’s resiliency thus far perhaps reflects: a) the possibility for the two sides to negotiate which might lead to subsequent tariff rollbacks; b) the potential for Chinese policymakers to intensify easing impetus; and, c) record-breaking pace of Southbound buying which has reached US$64 billion year to date,” Lau wrote.
“But with the US-China policy calendar still looking active in the coming weeks and the bilateral trade tensions escalating, we reiterate our view that the bull run will slow on event risks and profit-taking pressures, and now believe that the market may test our risk-case valuations in the short term until trade and policy clarity emerges, and/or a new tariff equilibrium is reached.”
First up to estimate tariff impact: beer maker Constellation Brands
It has been a busy weekend for the Street, with a lot of research teams working double time to estimate the impact of Trump’s new tariffs on companies and sectors (and then calm clients down, to the extent they can).
One note that caught my attention on Sunday is from EvercoreISI’s beverage analyst Robert Ottenstein ahead of Corona maker Constellation Brands (STZ) reporting earnings this coming Friday.
Here’s Ottenstein:
“Our first blush estimate, with no guidance from STZ yet, leads us to believe the most likely outcome is a $0.25-0.40 hit to STZ’s earnings. Assuming the company is USMCA compliant, the tariff impact results from the new 25% tariff on beer and empty aluminum cans, and just on the aluminum. We estimate STZ’s cost for an aluminum can ranges between $0.06-0.08/can, suggesting a $0.015-0.02 tariff impact/can. If that’s the case, we believe that STZ would probably absorb the impact of the tariff given current general beer demand weakness and that the tariff impact is relatively manageable in size.”
Constellation Brands will be in the unenviable position of being the first large company to put finer details on the tariff impact to investors.
Trump administration officials talk tariffs on Sunday shows
Trump administration officials are making the rounds on Sunday morning to back the president’s position and provide more information as markets prepare to reopen after a historically bad week.
Speaking to ABC News, U.S. National Economic Council Director Kevin Hassett claimed that “more than” 50 countries had already reached out to the White House to begin trade talks. Asked about a video claiming the president was purposely “crashing the stock market by 20%” that Trump’s Truth Social account shared on Friday, Hassett said: “He’s not trying to tank the market. He’s trying to deliver for American workers.”
Speaking to NBC News, Treasury Secretary Scott Bessent stated: “I see no reason that we have to price in a recession.”
Speaking to CBS, Commerce Secretary Howard Lutnick asserted that the tariffs “are definitely going to stay in place for days and weeks. That is sort of obvious. The president needs to reset global trade.”
Netanyahu hoping Trump will ease 17% tariffs on Israeli goods
JERUSALEM (Reuters) – Israeli Prime Minister Benjamin Netanyahu said on Sunday he hopes U.S. President Donald Trump will ease tariffs imposed on Israel when the two meet in Washington this week.
Under a sweeping new tariff policy announced by Trump, Israeli goods face a 17% U.S. tariff. The U.S. is Israel’s closest ally and largest single trading partner.
Netanyahu, who has spent the last few days visiting Hungary, departs for Washington on Sunday for an impromptu visit with Trump that is expected to take place on Monday, officials said.
He said in a statement that the talks will cover Israeli hostages still held in Gaza after 18 months, achieving victory in Gaza and the tariff regime on Israel.
“I hope that I will be able to help on this issue. That is the intention,” Netanyahu said of the tariffs. “I am the first international leader, the first foreign leader, who will meet with President Trump on the issue, which is so important to the Israeli economy.”
Future of prosecco, other Italian wines in the US uncertain under Trump’s 20% tariffs
With President Donald Trump imposing a 20% tariff on all imports from Europe as part of his “Liberation Day” announcement, producers of Italian wines and US importers are worried things will already get worse for their businesses, Reuters reports.
Italy imports more wine to the US than any other country; last year it sold $2.2 billion to the US, which represents 25% of its total global exports:
China investors brace for ‘ugly’ Monday on US tariff retaliation
(Bloomberg) — China investors are bracing for a grim Monday as the nation’s markets return from an extended weekend and factor in its retaliation to US tariffs.
A gauge of Chinese stocks listed in the US plunged 8.9% on Friday, the most since October 2022, amid global market turmoil after Beijing announced 34% tariffs on all imports from the US. That came during a holiday for Chinese and Hong Kong equities, which will restart trading on Monday.
A fall of similar magnitude in the local shares could put multiple Chinese equity gauges — such as this year’s top major global performer, the Hang Seng China Enterprises Index — into a technical correction, and in some cases close to a bear market.
BRUSSELS (Reuters) — European Union countries will seek to present a united front in the coming days against U.S. President Donald Trump’s tariffs, likely approving a first set of targeted countermeasures on up to $28 billion of U.S. imports from dental floss to diamonds.
Such a move would mean the EU joining China and Canada in imposing retaliatory tariffs on the United States in an early escalation of what some fear will become a global trade war, making goods more expensive for billions of consumers and pushing economies around the world into recession.
Taiwan won’t take reciprocal tariffs against US, will remove trade barriers
TAIPEI (Reuters) – Taiwan President Lai Ching-te said on Sunday that Taiwan will not impose reciprocal trade tariffs against the United States, but will remove trade barriers and Taiwanese companies will gradually increase their investments in the country.
A couple of large trade groups are warning that sneakers and other footwear will go up in price for American consumers if steep tariffs go through against various countries who make these items cheaply.
US, Vietnamese businesses ask Trump to delay 46% tariffs on Vietnam
HANOI (Reuters) — U.S. and Vietnamese businesses have asked the Trump administration to delay its planned 46% tariff on Vietnamese goods, saying the levy will hurt them and bilateral commercial relations.
The Vietnam Chamber of Commerce and Industry and the American Chamber of Commerce in Hanoi expressed concern to Commerce Secretary Howard Lutnick in a letter dated Saturday, saying the tariff, to take effect on Wednesday, was “shockingly high.”
“Lower tariffs for products coming into Vietnam, and for products reaching the American consumer is what will help U.S. companies, the economy, and consumers,” AmCham and VCCI said in a statement. “Higher tariffs will not.”
Indonesia will not retaliate against Trump tariff, official says
JAKARTA (Reuters) — Indonesia will not retaliate against U.S. President Donald Trump’s 32% trade tariff on Southeast Asia’s largest economy, its senior economic minister said on Sunday in the government’s first response to the levy.
Chief Economic Minister Airlangga Hartarto said in a statement that Indonesia would pursue diplomacy and negotiations to find mutually beneficial solutions after Trump announced sweeping global tariffs on Wednesday.
“The approach was taken by considering the long-term interest of bilateral trade relation, as well as to maintain the investment climate and national economic stability,” Airlangga said, adding that Jakarta will support potentially impacted sectors, such as apparel and footwear industry.
Trump tariffs may hammer these luxury goods giants that cater to the wealthy
The world’s largest luxury goods companies may not be immune from the effects of tariffs, Yahoo Finance’s Brian Sozzi reports.
“The new import duties are worse than what had been anticipated, and a material headwind to the sector,” JPMorgan analyst Chiara Battistini wrote in a note to clients.
Battistini noted that the luxury goods sector “generates 20-25% of sales on average in the US,” exports from Europe, and has little flexibility to shift production.
Europe, where many luxury goods giants such as LVMH (MC.PA), Kering (KER.PA), and Burberry (BRBY.L) manufacture their goods, was hit with a 20% tariff.
Battistini also called luxury giants’ pricing power into question, as even high-income consumers could start to pull back if high street fashion brands jack up prices to compensate for tariffs
JPMorgan’s research shows Ferragamo (SFER.VI) has already starting raising the prices of some of its handbags and ballet flats due to tariffs.
“The aspirational consumer is going to be in hibernation as the impact of February/March Challenger job cuts report planned layoffs start to hit,” Tematica Research chief investment officer Chris Versace told Sozzi.
Elon Musk calls for ‘zero-tariff situation’ between the US and Europe
Elon Musk, the world’s richest person and an advisor of sorts to President Trump, said on Saturday that the US and Europe should mutually agree to “a zero-tariff situation.”
“Both Europe and the United States should move, ideally, in my view, to a zero-tariff situation, effectively creating a free-trade zone between Europe and North America,” Musk said at an event hosted by Italian deputy prime minister Matteo Salvini. “And that’s what I hope occurs.”
The tariff rate applied to the European Union, slated to go into effect on April 9, currently sits at 20%.
After calling for “more freedom for people to move between Europe and North America if they wish” for employment, Musk added: “So that has certainly been my advice to the president.”
Here are Musk’s full remarks, with the tariff comments coming around 11:40:
Trump’s tariff gamble
A key premise of the Trump administration’s tariff policy is the belief that these policies will lead to a domestic manufacturing boom after decline in the number of those jobs so far in the 21st century.
“Jobs and factories will come roaring back into our country,” President Trump asserted on Wednesday when announcing the tariff policy, adding: “We will supercharge our domestic industrial base.”
Bloomberg’s Catherine Lucey reports that some experts “questioned Trump’s underlying logic, saying supply chain issues, high costs, workforce needs and the laborious process of moving production to the US stand in the way.”
Therein lies the gamble Trump is making: Either the policy succeeds in spurring a lucrative domestic manufacturing boom or American investors and consumers pay a hefty price for little in return.
Pittsburgh-based aerospace company declares force majeure
(Reuters) – Howmet Aerospace, which supplies parts for planes built by Airbus and Boeing, may halt some shipments if they are impacted by tariffs announced by U.S. President Donald Trump, according to a letter seen by Reuters.
Pittsburgh-based Howmet said in the letter to customers that it has declared a force majeure event, a legal practice that allows parties to a contract to avoid their obligations if hit by unavoidable and unpredictable external circumstances.
“Howmet will be excused from supplying any products or services that are impacted by this declared national emergency and/or the tariff executive order,” Howmet wrote in the letter.
