U.S. stock futures fell on Sunday evening as Wall Street braced for potential escalation in President Donald Trump’s trade war. According to The Wall Street Journal, advisers within the White House are considering a global tariff of up to 20% on nearly all U.S. trading partners. Although reciprocal tariffs remain an option, this new proposal signals a shift towards more aggressive measures aimed at transforming the U.S. economy.
Stock Futures Decline Amid Trade Tensions
Dow futures dropped by 170 points, or 0.41%, while S&P 500 futures fell by 0.77%, and Nasdaq futures sank 1.4%. This follows a selloff on Friday, which saw the broad market index fall by 2%.
The yield on the 10-year Treasury bond also dropped by 5.9 basis points to 4.196%.
White House Considers Aggressive Tariff Strategy
Over the weekend, tariff news dominated the headlines, signaling that further escalation may be on the horizon. The Wall Street Journal reported that Trump has urged his advisers to adopt more aggressive tariff policies, which may include higher rates affecting a broader range of nations.
One of the options currently being considered is a global tariff of up to 20%, which would impact nearly all U.S. trading partners. This proposal echoes a similar idea Trump mentioned during his 2016 presidential campaign.
If enacted, a 20% tariff would significantly increase the effective U.S. tariff rate. Fitch Ratings previously estimated that Trump’s existing tariff plans could push the U.S. tariff rate to an average of 18%, the highest level in 90 years.
Potential Shift to a Universal Tariff
Reciprocal tariffs—where the U.S. matches duties or trade barriers imposed by other countries—are also still under consideration. However, reports suggest that Trump is leaning towards a “big and simple” policy, which would apply tariffs uniformly rather than targeting specific countries, as outlined in Treasury Secretary Scott Bessent’s “dirty 15” plan.
Additionally, The Washington Post reported on Saturday that Trump is exploring a universal tariff to help transform the U.S. economy. This approach would apply the same tariff rate to most imports, regardless of their country of origin. Trump believes this method would reduce the risk of exemptions watering down the policy.
Trump’s Stance on Auto Tariffs
Intense discussions are taking place ahead of Wednesday, which Trump has labeled as “Liberation Day.” This day is when his next round of tariffs is expected to be unveiled.
Trump has already imposed tariffs on China, Canada, Mexico, steel, aluminum, and autos. He has also threatened duties on pharmaceuticals, microchips, lumber, and the European Union. Despite this, he has suggested that he might show some “flexibility” regarding reciprocal tariffs, raising hopes that their impact might be less severe.
However, after his announcement of new auto tariffs on Wednesday, the stock market experienced another selloff, driven by concerns over rising inflation and consumer expectations of future price increases.
In an interview with NBC News on Saturday, Trump stood firm on his auto tariffs, saying they are permanent. He also made it clear that he is unconcerned if foreign automakers raise prices as a result.
“I couldn’t care less if they raise prices,” Trump said. “People are going to start buying American-made cars. I hope they raise their prices because if they do, people are gonna buy American-made cars. We have plenty.”
Key Economic Reports This Week
Investors will be closely monitoring several important economic reports this week to gauge the impact of Trump’s tariffs on the economy. On Tuesday, the Institute for Supply Management will release its manufacturing activity index for March, and the Labor Department will report on February job openings and turnover.
On Wednesday, ADP will release private-sector payroll data for March. Thursday will see the release of ISM’s services-activity index, along with weekly jobless claims from the Labor Department.
Finally, Friday will bring the highly anticipated March jobs report from the Labor Department, and Federal Reserve Chairman Jerome Powell is also scheduled to speak, providing further insights into the economic outlook.
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