The tariffs imposed by Trump have caused trillion-dollar losses for American businesses
President Donald Trump's sweeping tariffs on foreign imports on Thursday caused massive losses for American companies totaling more than $2 trillion, escalating concerns about an imminent economic downturn.
The majority of economic sectors suffered large losses, with technology companies, banks, retail, apparel companies, and airlines leading the way. The US financial markets saw their biggest daily decline since the COVID-19 pandemic crisis five years ago.
Investors worry that higher prices brought on by tariffs will cause consumers to reduce their spending, which will hurt company performance.
Investors dumped shares of companies most impacted by the policy, which essentially amounts to an additional tax on businesses, as many economists characterized these tariffs as significantly worse than anticipated.
Since consumer spending makes up roughly 70% of all economic activity in the US, this tax will frequently be passed on to consumers, which could result in a drop in demand, a halt in production, and even an economic downturn.
According to the Associated Press, Olu Sunola, head of economic research at Fitch Ratings, said that this action might mark a "turning point" for the global economy as well as the US economy, forecasting that many nations will experience a recession.
The S&P 500 saw the largest drop, losing 4.8% of its value and wiping out over $2 trillion in value from the companies that were listed on it.
In anticipation of more market volatility in the days ahead, a number of significant industries saw significant drops in their market capitalization during Thursday's trading, with technology, retail, and banking stocks leading the losers.
Tech stocks crashed after Trump announced tariffs, with Apple alone suffering losses of over $250 billion. Other companies like Microsoft, Amazon, Meta, and Google also experienced losses of varying magnitudes.