On Sunday evening, US stock futures declined as financial markets prepared for potential changes in trade policy under President Donald Trump’s administration. Reports from the Wall Street Journal indicated that advisers were considering implementing a global tariff of up to 20% on nearly all countries, although reciprocal tariffs remained an option. This was in response to earlier assertions that Trump was contemplating more aggressive tariffs to restructure the US economy.
Investors faced uncertainty as a pivotal week unfolded for both market performance and the broader economy amid reports suggesting an intensification of President Trump’s trade tensions. The Dow futures experienced a drop of over 180 points, equivalent to 0.43%, while S&P 500 futures decreased by 0.5%, and Nasdaq futures fell by 0.7%, following a selloff on Friday that saw a 2% decline in the market index.
The focus during the weekend was on tariff news that hinted at further escalation. According to the Wall Street Journal, sources revealed that Trump was advocating for more assertive tariff strategies, which could include higher rates affecting a broader range of countries. A global tariff rate of up to 20% had been debated, revisiting a concept Trump had put forward during his campaign.
Such a rate increase could elevate the stakes significantly. Fitch Ratings previously estimated that if Trump executed all his announced plans, the US tariff rate might average 18%, a peak not seen in 90 years. The potential for reciprocal tariffs, or matching the duties imposed by other countries, remains under consideration. However, as one source noted, Trump aims for a "big and simple" strategy, suggesting a wider application than the targeted tariffs proposed by Treasury Secretary Scott Bessent on countries deemed unfavorable for trade.
The White House did not immediately offer a comment regarding the situation.
Additionally, the Washington Post reported over the weekend that Trump was contemplating a universal tariff, aiming to fundamentally alter the US economic landscape. A universal tariff would apply a consistent rate across all imports, regardless of origin, and Trump considers this approach less vulnerable to dilution through exemptions.
Discussions on this subject are taking place as Trump is set to unveil the next series of tariffs on Wednesday, a day he refers to as “Liberation Day.”
Trump has already imposed tariffs on various sectors including China, Canada, Mexico, steel, aluminum, and automobiles, and has made threats concerning pharmaceuticals, microchips, lumber, and the European Union. Recently, he alluded to possible “flexibility” on reciprocal tariffs, which were previously reported to be more focused, offering some optimism in financial markets for reduced impact.
However, the announcement of new tariffs on automobiles last Wednesday contributed to a market downturn, compounded by indications that tariffs might be exacerbating inflation and altering consumer expectations about future inflation.
On Saturday, Trump defended his automobile tariffs, stating to NBC News that they are permanent and he does not mind if they cause price hikes by car manufacturers. He expressed indifference toward potential price increases, believing it would lead consumers to purchase American-made vehicles.
In the meantime, several significant reports are due to be released this week, which could provide insights into the economic strain from Trump’s tariffs and notable federal job cuts. Notably, the Institute for Supply Management will release its manufacturing activity index for March on Tuesday, followed by the Labor Department’s report on February job openings and turnover. On Wednesday, ADP will share private-sector payroll data, and Thursday will see the publication of ISM’s monthly services-activity index alongside weekly jobless claims. Lastly, the Labor Department’s closely watched March jobs report is due on Friday, with Federal Reserve Chairman Jerome Powell also scheduled to speak.
This narrative was initially published on Fortune.com.
