Latest tariffs prompt slight market pullback

Equity markets pulled back Thursday as investors reacted to fresh trade policy developments out of Washington, with U.S. President Donald Trump announcing new tariffs aimed at foreign-made vehicles.
The Dow Jones Industrial Average dropped 155.09 points, or 0.37%, closing at 42,299.70. The S&P 500 slipped 0.33% to 5,693.31, while the Nasdaq Composite fell 0.53% to 17,804.03.
Automaker stocks were hit hard following Trump’s announcement late Wednesday of a 25% tariff on any vehicle not manufactured domestically in the U.S., set to take effect on April 2. General Motors shares dropped more than 7%, while Ford declined nearly 4%. Tesla bucked the trend, rising 0.4%, as analysts suggested its domestic production footprint could give it a competitive advantage under the new tariff structure.
Trump has long expressed frustration over countries that impose duties on American goods, and stated the latest levies will remain in place throughout his second term. He described the tariffs as permanent retaliatory measures aimed at levelling the trade playing field.
Despite the tough rhetoric, some investors found solace in the president’s remarks suggesting a degree of flexibility. On Wednesday, he indicated that the tariffs would be “very lenient”, and hinted at a willingness to lower levies on Chinese imports to facilitate negotiations with ByteDance over the fate of TikTok.
However, tensions flared again Thursday after Trump warned of “far larger” tariffs targeting the European Union and Canada if the two regions were seen coordinating against U.S. trade measures.
The uncertainty has added to market unease, with concerns mounting about the broader economic fallout from aggressive trade policies.
“I think it’s just the almost scattershot way that trade policy’s being implemented that maybe has investors on edge … just the approach [the Department of Government Efficiency] has taken worries folks that something may fall through the cracks. It’s not so much the policy, it’s the way they’re going about it,” said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute.
Samana added that some clarity on the administration’s trade framework could help markets stabilise. “If in the next couple weeks we have a trade and tariff framework in place, and companies and consumers can start to make decisions again with some clarity, it’s possible that this was all a near-term speed bump and we start to get kind of back on track.”
Despite Thursday’s declines, the major indexes remain modestly higher on the week. The S&P 500 is up 0.5%, the Nasdaq has gained 0.1%, and the Dow has risen roughly 0.8%.