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Trump's triple-digit tariff essentially cuts off most trade with China, says economist

1. Trump's tariffs on China increased to 145%, cutting most trade. 2. Market declines followed the confirmation of the new tariff rate. 3. Expectations of ongoing trade tensions remain uncertain until July. 4. Tariff policies could lead to a historic revenue increase of $171.6 billion. 5. China retaliated with increased levies on U.S. imports, now at 84%.

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FAQ

Why Bearish?

High tariffs may hinder global trade, negatively impacting S&P 500. Historically, significant tariffs correlate with market declines (e.g., 1930 Smoot-Hawley Tariff).

How important is it?

Tariff increases and trade war fears significantly affect economic outlook, influencing S&P 500 high sensitivity to trade policies.

Why Short Term?

Immediate market reactions to tariff announcements are expected, but long-term effects depend on negotiations and resolutions.

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