Donald Trump's latest tariffs loom, set to deepen global trade war

President Donald Trump’s “reciprocal” tariffs on dozens of countries were set to take effect on Wednesday, including massive 104% duties on Chinese goods, deepening his global trade war even as he prepared for negotiations with some nations.

Trump’s punishing tariffs have shaken a global trading order that has persisted for decades, raised fears of recession and driven worldwide stocks sharply downward.

The S&P closed below 5,000 for the first time in nearly a year on Tuesday and is nearing a bear market, defined as 20% below its most recent high.

S&P 500 companies have lost $5.8 trillion in stock market value since Trump unveiled the tariffs last Wednesday, the deepest four-day loss since the benchmark’s creation in the 1950s, according to LSEG data.

A sell-off across Asian markets resumed on Wednesday after a brief respite, with Japan’s Nikkei (.N225), opens new tab down over 3% and South Korea’s won currency sliding to a 16-year low. U.S. stock futures also pointed to a fifth straight day of losses on Wall Street.

Trump has offered investors mixed signals about whether the tariffs will remain in the long term, describing them as “permanent” but also boasting that they are pressuring other leaders to ask for negotiations.

“We have a lot of countries coming in that want to make deals,” he said at a White House event on Tuesday afternoon. He said at a later event that he expected China to pursue an agreement as well.

Trump’s administration has scheduled talks with South Korea and Japan, two close allies and major trading partners, and Italian Prime Minister Giorgia Meloni is due to visit next week.

The prospect of deals with other countries had pushed stock markets up earlier on Tuesday, but U.S. stocks had ceded their gains by the end of the trading day.

A table showing sectors of imported products and the corresponding estimated price increases that could result from Trump’s sweeping tariffs, ranging from 10% for medical diagnostic equipment to 30% for computer parts and toys & video games.

Donald Trump nearly doubled duties on Chinese imports, which had been set at 54% last week, in response to counter-tariffs that Beijing announced last week. China has vowed to fight what it views as blackmail.

Economists have warned that U.S. consumers are likely to face higher prices on everything from sneakers to wine as a result of the trade war.

The full effects of Wednesday’s tariffs may not be felt for some time, as any goods already in transit as of midnight will be exempt from the new levies as long as they arrive in the U.S. by May 27.

Nearly three-quarters of Americans expect the prices of everyday items to rise in the next six months, a new Reuters/Ipsos poll found.

Trump’s earlier across-the-board 10% tariffs on all imports from many countries began on Saturday. The latest round of duties, which took effect at 12:01 a.m. ET (0401 GMT), are aimed at countries that are “ripping off” the U.S., according to Donald Trump.

That list includes many of the United States’ closest allies, including the European Union, which was hit with a 20% tariff. Vietnam, which benefited from the shift of U.S. supply chains away from China during Donald Trump’s first-term trade war with Beijing, faces a 46% tariff.

Donald Trump has said the tariffs are a response to barriers put on U.S. goods that have stymied American businesses. He has also accused countries including Japan of devaluing their currencies to gain a trade advantage, something Tokyo denies.

Japan’s finance minister on Wednesday said trade negotiations with Washington could include foreign exchange rates.

Donald Trump has signaled he may not be finished on tariffs.

In remarks to Republican lawmakers on Tuesday evening, he said he would soon announce “major” tariffs on pharmaceutical imports, one of a handful of categories of goods that have been exempted from the new taxes.