Markets Dive 400 Points as Trump Unveils 25% Tariff on Japanese and Korean Goods: Live Updates

Amid escalating trade tensions, President Trump’s announcement of a 25% tariff on goods from Japan and South Korea triggered a significant decline in U.S. stock markets, with the S&P 500 plummeting nearly 5%, marking its most severe one-day drop since June 2020.

Short Summary:

• The S&P 500 faced a steep drop amid new tariffs announced by Trump.
• Trump claimed tariffs would lead to U.S. economic growth despite market turmoil.
• International responses were swift, with countries expressing concern over trade implications.

The announcement of new tariffs imposed by President Donald Trump has sent shockwaves through Wall Street, resulting in the sharpest decline in stock prices since the onset of the COVID-19 pandemic. The S&P 500 index experienced a staggering plunge of almost 5% on Thursday, echoing fears of a global economic downturn stemming from Trump’s extensive trade policy changes. Analysts noted that this market dip follows a period of compounded losses, where the S&P had already suffered in five out of the last six weeks.

Experts assert that the risks associated with these tariffs extend beyond the stock market, potentially influencing consumer prices and employment rates. Lawrence Summers, a former Treasury Secretary, underscored the gravity of the situation by stating:

“Never before has an hour of Presidential rhetoric cost so many people so much,”

indicating the widespread implications of such abrupt economic policies.

President Trump, however, remained optimistic amid the market upheaval. In a tweet following the steep losses, he expressed confidence in the resilience of American markets, stating:

“The markets are going to boom. The country is going to boom.”

Despite his assurances, the economic climate is fraught with uncertainty as economists within the electorate voice concerns regarding price hikes that could deter hiring activities among businesses, leading to potential layoffs.

The tariffs announced on Wednesday were far steeper than originally anticipated. While prior statements indicated a more moderate 10% levy on imports, the new 25% tariff will apply universally to all imports from Japan and South Korea, as stated in letters Trump dispatched to the respective leaders of both nations. The letters articulated the U.S. commitment to institute more balanced trade relations, a sentiment Trump described as a necessity for national security due to the trade deficits resulting from existing policies.

Leaders from around the world responded quickly to these tariffs. China’s officials condemned the actions as “self-defeating bullying,” asserting that they are prepared to implement countermeasures to protect their economic interests. The Chinese state media echoed these sentiments, framing the tariffs as detrimental not only to global economic health but also to U.S. consumer welfare.

In Europe, Ursula von der Leyen, President of the European Commission, emphasized solidarity among EU member states regarding the tariffs, stating:

“If you take on one of us, you take on all of us.”

French President Emmanuel Macron called on businesses across Europe to halt all investments in the United States until more clarity emerges regarding the tariff situation.

For Japan, comments from Prime Minister Shigeru Ishiba reflected a cautious stance, labeling the tariffs as “extremely regrettable” while refraining from announcing any immediate retaliatory measures—a stark contrast to the more aggressive responses from other nations facing similar tariffs.

As the financial landscape adjusts to these rapid policy changes, economists are closely monitoring the upcoming employment figures from the Bureau of Labor Statistics, scheduled for release shortly. These numbers will be crucial in assessing the real-time effects of such tariffs on American job growth and economic stability.

The specifics of the tariffs illustrate a sweeping approach: tariffs will also be levied against Chinese goods at a staggering 34% rate, alongside a 20% duty targeting European imports, and 24% and 26% tariffs levied on Japan and India, respectively. The tariffs’ implications are deemed particularly concerning for Germany, whose economy has shown signs of stagnation.

In the midst of these developments, Trump issued a stern warning regarding potential retaliatory tariffs. He asserted that should either Japan or South Korea respond with their own levies on U.S. goods, the U.S. would reciprocate by proportionally increasing its 25% tariff. He elaborated,

“If for any reason you decide to raise your Tariffs, then, whatever the number you choose to raise them by, will be added onto the 25% that we charge.”

This market turbulence is not an isolated event; the looming expiration of a temporary pause on previous tariffs has intensified scrutiny among trade partners. Trump previously characterized the April 2 tariffs announcement as “Liberation Day,” asserting that the U.S. was subject to exploitative foreign policies—now he is backtracking, given the immediate global market implications. The sharp loss in stock value on Thursday is indicative of a broader, apprehensive market response to his latest announcements.

Notably, the Biden administration’s negotiating efforts have yet to yield significant trade agreements, with only two finalized deals—one with the United Kingdom and another with Vietnam. While Trump had previously hinted at more aggressive negotiations leading to “90 deals in 90 days,” reality on the ground appears less optimistic. With tensions escalating worldwide, the economic community awaits further direction regarding future trade relations.

Meanwhile, international bodies such as the European Union are actively working to prompt dialogue and potentially diffuse trade tensions. Von der Leyen’s recent dialogue with Trump reflects an urgent desire among trading partners to establish a more stable environment amid the unpredictability of U.S. tariffs.

While the immediate focus is on the tariffs, additional threats have loomed over nations aligning with BRICS (Brazil, Russia, India, China, and South Africa), as Trump has signaled an intention to impose an additional 10% tariff on these nations due to their perceived anti-American policies. Such rhetoric has only served to escalate tensions during a time when diplomatic negotiations seem increasingly tenuous.

Reflecting upon this chaotic economic landscape, it’s imperative for businesses and consumers alike to brace for the impact of these tariffs. As inflation concerns are raised, manifested in the Consumer Price Index’s climb of 2.4 % year-over-year, the sensitivity of the market indicates a burgeoning crisis that intelligence services and economists must continually assess.

In conclusion, while Trump’s administration remains optimistic about the enduring strength of the U.S. economy, the market’s reaction suggests that stakeholders are rightfully concerned. The coming days will provide critical insights into how these tariffs will reshape both U.S. consumer habits and broader international trade dynamics.

All is NOT Doom Gloom – Final Thoughts

While the markets may have reacted sharply to the announcement of a 25% tariff on Japanese and Korean imports, short-term volatility doesn’t always reflect long-term impact. Tariffs, while controversial, can be a powerful tool for renegotiating global trade terms, leveling the playing field, and incentivizing domestic production. For small and mid-sized American manufacturers, this move could usher in new opportunities to fill supply gaps and compete more aggressively. If the administration pairs these tariffs with strategic investments in U.S. industry, infrastructure, and workforce development, we may see a resurgence in sectors that have long been overshadowed by foreign competitors. As with any bold economic move, the initial noise may be loud—but the long game could tell a very different story.

About the Author

Ethan Cole is a business growth advisor and serial entrepreneur with over two decades of hands-on experience helping startups and small businesses thrive. With a background in finance and operations, he’s led multiple companies from early-stage concepts to multi-million-dollar exits. Ethan specializes in scaling strategies, cost reduction, and building systems that support sustainable growth. As a content contributor for Kwote Advisor, he shares practical insights to help business owners make smarter decisions when launching, managing, and expanding their ventures.