Layoffs in March surpassed 275,000, a near-record-setting figure topped only by those for April and May 2020, when the pandemic shut down much of the economy, according to data released Thursday by the outplacement firm Challenger, Gray & Christmas. The Department of Government Efficiency, which is working to shrink the government, was responsible for the vast majority of the cuts. While other jobs data remained stable, federal layoffs for the month were up 672% from a year prior.
United States President Donald Trump’s sweeping new tariffs on American imports shocked governments and investors worldwide, swiftly spurring both threats of retaliation and calls for negotiation as industries scrambled and global stocks tumbled.
China accused the U.S. of “bullying” and the European Union promised “robust” countermeasures, with French officials suggesting taxes to hit U.S. tech giants.
Yet the United Kingdom and Japan, among others, expressed hope for a deal with Trump and refrained from talk of retaliation against the world’s biggest economy, fearing that slapping their own tariffs on American goods would only make things worse.
Trump imposed a 34% levy on goods from China on top of an earlier 20% tariff, as well as a 20% tariff on the EU, 24% on Japan, and 25% on South Korea.
Trump has described the import taxes, ranging from 10% to 49%, as a way to reverse unfair treatment by American trading partners and draw factories and jobs back home.
Setting off for Florida from the White House on Thursday, he struck an optimistic note. “I think it’s going very well.”
“The markets are going to boom, the stock is going to boom and the country is going to boom,” Trump said.
China has already announced retaliatory measures
China, a key exporter to the U.S. of everything from clothing to kitchenware, has already announced a raft of retaliatory measures expected to raise prices for U.S. consumers.
“There are no winners in trade wars and tariff wars,” China’s Foreign Ministry spokesperson Guo Jiakun said. “It’s clear to everyone that more and more countries are opposing the unilateral bullying actions of the U.S.”
French President Emmanuel Macron met with representatives from key commercial sectors affected by the tariffs, like wines and spirits, cosmetics and aircraft, after urging businesses to suspend all investments in the U.S. “What would be the message of having major European players investing billions of euros in the American economy at a time when they’re hitting us?” Macron asked.
European Commission President Ursula von der Leyen denounced Trump’s levies as a “major blow to the world economy” but held off announcing new countermeasures. She said the commission — which handles trade issues for the 27 EU member countries — was “always ready” to talk.
Analysts say there’s little to be gained from an all-out trade war, since higher tariffs can restrain growth and raise inflation.
“Europe will have to respond, but the paradox is that the EU would be better off doing nothing,” said Matteo Villa, a senior analyst at Italy’s Institute for International Political Studies.
“Trump seems to understand only the language of force, and this indicates the need for a strong and immediate response,” Villa said. “The hope, in Brussels, is that the response will be strong enough to induce Trump to negotiate and, soon, to backtrack.”
Italian Prime Minister Giorgia Meloni told Italian state TV on Thursday that she hoped for exactly that.
“We need to open an honest discussion on the matter with the Americans, with the goal — at least from my point of view— of removing tariffs, not multiplying them,’’ Meloni said.
The next target could be U.S. tech companies
Europe’s strategy so far has been to limit retaliation to a few politically sensitive goods, like whiskey and Harley-Davidson motorcycles, in an attempt to push the U.S. to the negotiating table.
Economists say that Europe could broaden the trade war to the vast services sector by targeting Big Tech — a category more vulnerable to retaliation because the U.S. exports more than it imports.
The EU response could include a tax on U.S. digital giants such as Google, Apple, Meta, Amazon and Microsoft, as French officials have recommended.
Outgoing German Chancellor Olaf Scholz said the EU “must show that we have strong muscles.” But he expressed no appetite for sparking an all-out trade war that could hobble the bloc’s export-dependent economy.
“An agreement,” he said, “is best for prosperity in the U.S., for prosperity in Europe and for prosperity in the world.”
British Prime Minister Kier Starmer said his government would react with “cool and calm heads,” telling business leaders in London that he hoped to strike a trade deal with the U.S. that would see the tariffs rescinded.
“Nobody wins in a trade war, that is not in our national interest,” Starmer said.
Japan, the biggest foreign investor in the U.S. and its closest ally in Asia, plans to assess the impact of the tariffs, Chief Cabinet Secretary Yoshimasa Hayashi said, displaying a more conciliatory approach.
‘Blow to the world economy’
The round of tariffs jolted financial markets, with the U.S. Standard & Poors 500 off 3.7% in afternoon trading.
The STOXX Europe 600 index fell 2.7% and a 2.8% drop in Tokyo’s benchmark led losses in Asia. Oil prices sank more than $2 a barrel. Analysts fished for superlatives to convey the disruption to the global trading order as Trump’s announcement overturned decades of efforts to lower tariffs through free trade agreements and negotiations.
“The magnitude of the rollout — both in scale and speed — wasn’t just aggressive; it was a full-throttle macro disruption,” Stephen Innes of SPI Asset Management said.
With an average tariff of 25%-30%, the highest since the early 20th century, the U.S. has initiated a “radical policy reordering,” said Deutsche Bank’s Jim Reid.
The head of the World Trade Organization warned that U.S. protectionist measures will likely cause global trade volumes to drop by about 1% this year.
“I’m deeply concerned about this decline and the potential for escalation into a tariff war with a cycle of retaliatory measures that lead to further declines in trade,” said WTO Director-General Ngozi Iweala-Okonjo.
Higher prices loom
The tariffs are not paid by the foreign countries they target, but by the U.S.-based companies that buy the goods to sell to Americans.
Now companies must decide whether to absorb the new taxes or pass them on to consumers in the form of higher prices.
The makers of Italy’s Parmigiano Reggiano cheese, for instance, say the new tariffs mean U.S. consumers will pay more for their crumbly pasta topping.
“Americans continued to choose us even when the price went up” after an earlier round of Trump tariffs in 2019, said Nicola Bertinelli, president of the Parmigian Reggiano Consortium. “Putting tariffs on a product like ours, only increases the price for American consumers, without protecting local producers.”
The Consumer Brands Association, which represents big food companies like Coca-Cola and General Mills as well as consumer product makers like Procter & Gamble, warned that although its businesses make most of their goods in the U.S., they now face tariffs on critical ingredients — like wood pulp for toilet paper or cinnamon — that must be imported because of domestic scarcity.
“We encourage President Trump and his trade advisors to fine-tune their approach and exempt key ingredients and inputs to protect manufacturing jobs and prevent unnecessary inflation at the grocery store,” said Tom Madrecki, the association’s vice-president of supply chain resiliency.
On a Pacific island, incomprehension
An eye-popping 29% tariff imposed on Norfolk Island came as a shock to the remote South Pacific outpost’s 2,000 inhabitants, particularly as its governing nation, Australia, was hit with a far lower tariff of 10%.
“To my knowledge, we do not export anything to the United States,” Norfolk Island Administrator George Plant, the Australian government’s representative on the island, said Thursday. “We’re scratching our heads here.”
Vladimir Putin’s Russia, meanwhile, was left off Trump’s list.
U.S. companies had trillions of dollars in value wiped out Thursday after President Donald Trump slapped sweeping tariffs on foreign imports.
Virtually every sector suffered big losses as U.S. financial markets closed with their biggest one-day drop since COVID-19 flattened the global economy five years ago.
Banks, retailers, clothing, airlines, and technology companies were among the hardest hit, with consumers expected to cut spending if tariffs lead to higher prices for goods and services.
Many economists called the tariffs much worse than expected, and investors dumped shares in companies they predict will suffer most from what is effectively a business tax.
In many cases that tax will be passed on to consumers. If consumers pull back their spending because of higher prices, businesses will produce fewer goods and economic growth could stall or contract. Consumer spending makes up about 70% of economic activity in the U.S.
“This is a game changer, not only for the U.S. economy but for the global economy,” Olu Sonola, Fitch Ratings’ head of U.S. Economic Research, said in a report. “Many countries will likely end up in a recession.”
With a drop of 4.8% in the S&P 500, more than $2 trillion in value vanished, according to Howard Silverblatt, a senior index analyst at S&P Dow Jones Indices.
Here’s a breakdown of some of the market’s worst-performing sectors and companies on Thursday.
Airlines
Airlines had been projecting a strong year for profits. However, if Americans are faced with higher prices for essentials, economists say that could put a crimp in their travel budgets.
United Airlines, down 15.6%
American Airlines, down 10.2%
Delta Air Lines, down 10.7%
Clothing and shoes
Most major shoe and clothing makers have their products made outside of the U.S., meaning they will have to pay a tariff, or import tax, on all the goods that are shipped back into the country for sale here.
Nike, down 14.4%
Under Armour, down 18.8%
Lululemon, down 9.6%
Ralph Lauren, down 16.3%
Levi Strauss, down 13.7%
Retailers
Big box and online retailers also import a massive amount of their inventory from outside the U.S.
Amazon, down 9%
Target, down 10.9%
Best Buy, down 17.8%
Dollar Tree, down 13.3%
Kohl’s, down 22.8%
Technology
Companies that make and sell computers, smartphones, and other technology source many of their parts from abroad. Some manufacturers manufacture their entire products overseas, meaning they will have to pay a tariff when those products are shipped back for sale to consumers.
Apple, down 9.2%
HP, down 14.7%
Dell, down 19%
Nvidia, down 7.8%
Banks
If the economy slips into a recession, households and businesses will be less likely to borrow money as demand for products and services declines.
Wells Fargo, down 9.1%
Bank of America, down 11.1%
JPMorgan Chase, down 7%
Restaurants
American consumers, feeling less confident about their financial futures this year, have already been pulling back on spending at restaurants as they tighten their budgets and prioritize only essential goods and services.
Starbucks, down 11.2%
Cracker Barrel, down 12.7%
Cheesecake Factory, down 9.4%
Automakers
Somewhat surprisingly, automakers didn’t get hit as hard as most other sectors did on Thursday. That could be because most of Ford, GM and Stellantis’ steel and aluminum — which Trump previously announced tariffs on — already comes from the United States, reducing the direct impact the companies would feel from higher duties.
General Motors, down 4.3%
Ford, down 6%
Tesla, down 5.5%
Stellantis, down 9.4%
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President Donald Trump’s tariffs will hit Americans in the wallet as everyday items are likely to become more expensive.
While some products, like Crayola crayons and Dawn dish soap, are made in the U.S., and many Americans have already tried to get ahead of tariffs when it comes to big purchases like cars and appliances, most will still need items that come from overseas.
While Trump has insisted that foreign countries pay tariffs, they are actually paid by U.S. importers, and economists say that the cost is usually passed on to consumers.
China has been hit particularly hard, with the new 34% tariff coming on top of an existing 20% duty for a total 54% tariff.
Here are some things that might cost you more:
Coffee
Waking up in the morning might get a little rougher or at least more expensive. The U.S. imports most of its coffee from Brazil and Colombia, which will be subject to 10% tariffs. While Hawaii does grow coffee, Americans drink more than 200 times the amount that can be grown on the islands.
If you’re thinking of switching to tea for your caffeine boost, you’re also out of luck. The U.S. imports the majority of tea from countries receiving tariffs like Japan (24%), Argentina (10%), India (27%), China (54%), and Sri Lanka (44%).
Candy
Chocolate is another product that can’t be grown in the U.S. outside of Hawaii. The U.S. imports 80% of its cocoa beans from Latin American countries, which are hit with a 10% tariff.
If you’re not a chocolate fan, vanilla will also rise in price as most of it is imported from Madagascar, with a 47% tariff, and Indonesia, with a 32% tariff.
Sugar won’t make these price hikes any easier to swallow, with sugar imports also coming from Latin America as well as the Philippines, which will face an 18% tariff.
Clothes and shoes
As companies have moved away from producing clothes and shoes in China due to tensions between the two countries, they haven’t come back to the U.S.
Many retailers, including major brands like Nike and Steve Madden, have factories in Vietnam, which will have a 46% tariff, and Bangladesh, where products will have a 37% tariff.
Beauty products
Shea butter and cocoa butter, two key ingredients in many beauty products, come from Latin America and Africa, where most countries face a 10% tariff, and India, which will have a 27% tariff.
Ingredients or products from Europe will also see a tariff of 20%.
Fruits
The U.S. imports a significant portion of fruits and vegetables, especially when it comes to tropical fruits, berries, and out-of-season produce. Most of it comes from Mexico, where Trump has levied a 25% tariff, including 88% of all avocados (technically a fruit).
Ikea
Your go-to cheap furniture source won’t be so cheap anymore. IKEA is based in Sweden, which is part of the European Union and will be subject to a 20% tariff. Stock up on your ektorp and kallax while you can.
iPhones
Apple makes the majority of its phones in China, where they will face a 54% tariff. Other electronics are made in countries like Vietnam, which will face a 46% tariff.
Parts and metals used for electronic devices also come from around the globe and will face varying tariffs.
Barbie and Lego
Mattel warned that its toys, which include Hot Wheels, Barbie, and American Girl dolls, will go up in price due to 54% tariffs on China.
Lego, popular with kids and adults alike, will also see a tariff of 20% since it comes from EU member Denmark.
Wine and Scotch
European-made wines from countries like France, with its long-prized vineyards, will face 20% EU tariffs, while Scotch whisky will face a 10% tariff.
The good news is that there are American offerings to substitute, including wines from California and bourbon and whiskey from Kentucky and Tennessee (among other states).
Meat
Where’s the beef? Australia, apparently, will face a 10% tariff. Luckily, imports constitute a relatively small percentage of beef consumed in the U.S., where we have plenty of homegrown cattle.
Feed for those cattle (along with other livestock) is often imported from various countries, which could drive up the price of U.S. meat as well.
Canada, which faces a 25% tariff, also imports meat to the U.S., including pork, which may get more expensive.
Eggs
The price of eggs made headlines before the election, and the Trump administration has touted lower wholesale prices.
However, those prices were achieved in part by importing eggs from Turkey, which will face a 10% tariff, and Canada, which is subject to a 25% tariff.
Wall Street shuddered, and a level of shock unseen since COVID’s outbreak tore through financial markets worldwide Thursday on worries about the damage President Donald Trump’s newest set of tariffs could do to economies across continents, including his own.
The S&P 500 sank 4.8%, more than in major markets across Asia and Europe, for its worst day since the pandemic crashed the economy in 2020. The Dow Jones Industrial Average dropped 1,679 points, or 4%, and the Nasdaq composite tumbled 6%.
Little was spared in financial markets as fear flared about the potentially toxic mix of weakening economic growth and higher inflation that tariffs can create.
Everything from crude oil to Big Tech stocks to the value of the U.S. dollar against other currencies fell. Even gold, which hit records recently as investors sought something safer to own, pulled lower. Some of the worst hits walloped smaller U.S. companies, and the Russell 2000 index of smaller stocks dropped 6.6% to pull more than 20% below its record.
Investors worldwide knew Trump was going to announce a sweeping set of tariffs late Wednesday, and fears surrounding it had already pulled Wall Street’s main measure of health, the S&P 500 index, 10% below its all-time high. But Trump still managed to surprise them with “the worst case scenario for tariffs,” according to Mary Ann Bartels, chief investment officer at Sanctuary Wealth.
Trump announced a minimum tariff of 10% on imports, with the tax rate running much higher on products from certain countries like China and those from the European Union. It’s “plausible” the tariffs altogether, which would rival levels unseen in roughly a century, could knock down U.S. economic growth by 2 percentage points this year and raise inflation close to 5%, according to UBS.
Such a hit would be so big that it “makes one’s rational mind regard the possibility of them sticking as low,” according to Bhanu Baweja and other strategists at UBS.
Trump has previously said tariffs could cause “a little disturbance” in the economy and markets, and on Thursday he again downplayed the impact as he left the White House to fly to Florida.
“The markets are going to boom, the stock is going to boom and the country is going to boom,” Trump said.
Wall Street had long assumed Trump would use tariffs merely as a tool for negotiations with other countries, rather than as a long-term policy. But Wednesday’s announcement may suggest Trump sees tariffs more as helping to solve an ideological goal than as an opening bet in a poker game. Trump on Wednesday talked about wresting manufacturing jobs back to the United States, a process that could take years.
If Trump follows through on his tariffs, stock prices may need to fall much more than 10% from their all-time high to reflect the recession that could follow, along with the hit to profits that U.S. companies could take. The S&P 500 is now down 11.8% from its record set in February.
“Markets may actually be underreacting, especially if these rates turn out to be final, given the potential knock-on effects to global consumption and trade,” said Sean Sun, portfolio manager at Thornburg Investment Management, though he sees Trump’s announcement on Wednesday as more of an opening move than an endpoint for policy.
Trump offered an upbeat reaction after he was asked about the market’s drop as he left the White House to fly to his Florida golf club on Thursday.
“I think it’s going very well,” he said. “We have an operation, like when a patient gets operated on, and it’s a big thing. I said this would exactly be the way it is.”
One wild card is that the Federal Reserve could cut interest rates to support the economy. That’s what it had been doing late last year before pausing in 2025. Lower interest rates help by making it easier for U.S. companies and households to borrow and spend.
Yields on Treasurys tumbled in part on rising expectations for coming cuts to rates, along with general fear about the health of the U.S. economy. The yield on the 10-year Treasury fell to 4.04% from 4.20% late Wednesday and from roughly 4.80% in January. That’s a huge move for the bond market.
The Fed may have less freedom to move than it would like, though. While lower rates can goose the economy, they can also push upward on inflation. And worries are already worsening about that because of tariffs, with U.S. households in particular bracing for sharp increases to their bills.
The U.S. economy at the moment is still growing, of course. A report on Thursday said fewer U.S. workers applied for unemployment benefits last week. Economists had been expecting to see an uptick in joblessness, and a relatively solid job market has been the linchpin keeping the economy out of recession.
A separate report said activity for U.S. transportation, finance, and other businesses in the services industry grew last month. But the growth was weaker than expected, and businesses gave a mixed picture of how they see conditions.
Worries about a potentially stagnating economy and high inflation knocked down all kinds of stocks, leading to drops for four out of every five that make up the S&P 500.
Best Buy fell 17.8% because the electronics that it sells are made all over the world. United Airlines lost 15.6% because customers worried that the global economy may not fly as much for business or feel comfortable enough to take vacations. Target tumbled 10.9% amid worries that its customers, already squeezed by still-high inflation, may be under even more stress.
All told, the S&P 500 fell. 274.45 points to 5,396.52 The Dow Jones Industrial Average sank 1,679.39 to 40,545.93, and the Nasdaq composite tumbled 1,050.44 to 16,550.61.
In stock markets abroad, indexes fell sharply worldwide. France’s CAC 40 dropped 3.3%, and Germany’s DAX lost 3% in Europe.
Japan’s Nikkei 225 sank 2.8%, Hong Kong’s Hang Seng lost 1.5%, and South Korea’s Kospi dropped 0.8%.
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