Scott Bessent, the Treasury Secretary, cautioned other countries against taking hasty actions in response to Donald Trump’s tariff plan.
Following President Trump’s declaration of imposing tariffs starting at 10 percent, US stocks experienced a significant decline in after-hours trading. Higher rates were specified for certain nations.
Shortly after Trump’s announcement, futures linked to the S&P 500 index in the US went down by two percent, while the Nasdaq fell by three percent. These were substantial drops similar to those witnessed at the onset of the pandemic.
Bessent urged caution both from the American public and from America’s trading partners, issuing a stark warning as the tariffs kick in.
‘Sit back, take a deep breath, don’t immediately retaliate. Let’s see where this goes, because if you retaliate, that’s how we get escalation,’ Bessent told CNN.
He ultimately advised other countries that ‘doing anything rash would be unwise.’
‘A trade war depends on the country. But remember that the history of trade is we are the deficit country. The deficit country has an advantage. They are the surplus countries. The surplus countries traditionally, always lose any kind of trade escalation,’ Bessent added.
Several nations have already said they would be prepared for when the tariffs begin to respond to Trump’s actions.
‘As a student of economic history or a professor of economic history, I’d advise against’ trying to get revenge.
Bessent’s advice to remain calm may mirror what Trump is going to do, as he said the president’s tariffs could be temporary and they’re going to ‘wait and see how this plays out.’
The US President said his ‘liberation day’ announcement was a ‘declaration of economic independence’.
The White House announced a baseline 10 percent tariff on all imports, effective April 5, with higher rates for countries imposing steeper duties on US goods.
Trump confirmed that from midnight in Washington, a 25 percent tariff would be imposed on all foreign cars imported to the US.
Trump held up a chart while speaking at the White House, showing the United States would charge a 34 percent tax on imports from China, a 20 percent tax on imports from the European Union, 25 percent on South Korea, 24 percent on Japan and 32 percent on Taiwan.
The president used aggressive rhetoric to describe a global trade system that the United States helped to build after World War II, saying ‘our country has been looted, pillaged, raped, plundered’ by other nations.
Trump declared a national economic emergency to launch the tariffs, expected to produce hundreds of billions in annual revenues.
He has promised that factory jobs will return back to the United States as a result of the taxes, but his policies risk a sudden economic slowdown as consumers and businesses could face sharp price hikes on autos, clothes and other goods.
‘Taxpayers have been ripped off for more than 50 years,’ Trump said in remarks at the White House. ‘But it is not going to happen anymore.’
The president kicked off his speech just after 4pm by giving a blistering tirade, slamming ‘friend and foe’ for ‘ripping off’ America.
He condemned ‘foreign scavengers.’ And he talked of other nations that had ‘pillaged, raped and plundered’ the U.S. and ‘foreign cheaters’ who ‘ransacked’ American factories.
It took nearly 20 minutes before Trump shared the tariff details.
‘For nations that treat us badly we will calculate the combined rate of all their tariffs, non-monetary barriers and other forms of cheating. And because we are being very kind… We will charge them approximately half of what they charge us,’ Trump said.
Trump then held up a large sign that showed the calculations.
As Trump went through the chart, he knocked even some of the U.S.’s closest allies for charging import taxes.
‘The European Union. They’re very tough, very, very tough traders. You think of European Union, very friendly. They rip us off. It’s so said to see. It’s pathetic,’ Trump said. ‘Thirty-nine percent, we’re going to charge them 20 percent, so we’re charging them essentially half.’
Trump called Vietnam ‘great negotiators’ and said they were ‘great people.’
‘They like me, I like them. The problem is they charge us 90 percent. We’re going to charge them 46 percent,’ he said.
Trump blasted Taiwan and said they ‘took all of our computer chips and semiconductors.’
Taiwan will be charged 32 percent.
‘Japan – very, very tough, great people,’ Trump continued.
Japan will be hit with a 24 percent tariff.
Trump also said that India was ‘very, very tough’ while complimenting Prime Minister Narendra Modi as a ‘great friend of mine.’
‘But I said, ‘You’re a friend of mine but you’re not treating us right,” Trump said, pointing out that India will now be charged 26 percent.
The largest tariff will hit the African nation of Lesotho, at a rate of 50 percent.
Canada and Mexico were exempt from Wednesday’s tariff announcement, due to the president already charging them 25 percent excluding the goods outlined in the trade agreement from Trump’s first administration.
‘They all understand, we’re gonna have to go through a little tough love maybe? But they all understand. They’re ripping us off and they understood,’ Trump said.
Trump had been heralding the tariff announcement as ‘Liberation Day’ for weeks but up until the event kicked off, it appeared some of the details hadn’t been fully worked out.
Wall Street fears the move will stifle economic growth, drive up inflation and further rattle global stock markets when trading resumes in Asia and Europe on Thursday.
Most Americans’ retirement savings, including 401(K)s, are tied to stock market performance. They are invested in shares and funds that track the major indices.
At 6.30pm in after-hours trading in New York, futures that track the S&P 500 were down 2.3 percent, while one that is tied to the Nasdaq-100 fund dropped 4.2 percent. A fund that follows the Dow Jones slipped 2.3 percent.
Stocks of major importers took a hit late Wednesday. Nike plunged 6 percent, and General Motors fell 3 percent. Companies already struggling amid tariff concerns, like Nvidia and Tesla, each lost about 3 percent. Five Below dropped 11 percent, while Gap tumbled 12 percent.
Although Wall Street’s main trading sessions ends at 4pm in New York, traders can continue buying and selling regular stocks until 8pm in after-hours trading.
Beyond that, investors can trade futures contracts around the clock, except for a one-hour break starting at 5pm each day. Futures track the prices of major indexes like the S&P 500, Nasdaq, and Dow Jones, as well as gold and other commodities.
Americans will have already seen their retirement funds take a hit based on after-hours trading and futures. If prices don’t recover, they’ll face a bigger blow when markets open at 9.30am in New York on Thursday.
