New York, USA – The S&P 500, a major stock market index in the United States, closed in correction territory on Thursday due to concerns surrounding President Donald Trump’s trade wars. Speculation and uncertainty regarding international trade policies have left investors on edge, leading to a more than 10% decline from its peak on February 19. As Wall Street navigates through a second week of pressure, the technology-focused Nasdaq Composite also experienced a correction in its closing on Thursday, with the Dow Jones falling over 9% from its peak in December.
Amidst escalating tensions, President Trump threatened to impose a new 200% tariff on European alcohol in response to a 50% tariff on American bourbon imports from the EU. This move comes after Canada and the EU retaliated against American tariffs on steel and aluminum imports by imposing tariffs on American exports worth over $40 billion. Both Canadian and European leaders have vowed not to back down to Trump’s threats, emphasizing their commitment to standing firm against the trade war currently unfolding.
Despite the administration’s willingness to impose tariffs, some temporary concessions have been made. For instance, Trump recently decided not to increase tariffs on steel and aluminum imports from Canada to 50% after Ontario abandoned plans to impose tariffs on electricity exports to the US. Additionally, the administration postponed implementing 25% tariffs on all Mexican and Canadian imports until the beginning of April. However, concerns about the long-term impact of these tariffs on the US economy persist.
US Treasury Secretary Scott Bessent downplayed worries about market volatility on Thursday, emphasizing the administration’s focus on long-term gains for the American people. Even as the stock market experienced brief relief following a February inflation report, concerns have resurfaced due to the imposition of tariffs by Canada and the EU on American exports. With uncertainty surrounding Trump’s trade policies, Federal Reserve officials are expected to maintain interest rates at their upcoming meeting, adding to apprehensions among investors on Wall Street.
