Trump to Announce Reciprocal Tariffs at 3 p.m. on the 2nd
USTR Releases Country-Specific Trade Barriers Report the Day Before
Heightened Caution Amid Tariff Uncertainty and Trade War Concerns
The three major indices of the U.S. New York stock market all opened lower on the first trading day of this month, the 1st (local time). As U.S. President Donald Trump’s so-called 'Liberation Day' for announcing reciprocal tariffs approaches, investor caution over the global trade war is increasing.
As of 9:55 a.m. in the New York stock market on this day, the blue-chip-focused Dow Jones Industrial Average (Dow Index) was trading at 41,791.85, down 209.91 points (0.5%) from the previous trading day. The large-cap-focused S&P 500 Index was down 12.89 points (0.23%) at 5,598.96, and the tech-heavy Nasdaq Index was down 24.97 points (0.14%) at 17,274.32.
By individual stocks, automobile maker Ford was down 1%. General Motors (GM) was down 0.7%. Nvidia was down 0.79%. Apple and Microsoft (MS) were up 0.46% and 0.87%, respectively.
President Trump will announce reciprocal tariffs at 3 p.m. on the 2nd (4 a.m. on the 3rd Korean time) at the White House Rose Garden, with the full second-term administration staff in attendance. Following the announcement of tariffs on items such as steel, aluminum, and automobiles, the administration will review tariff and non-tariff barriers of various countries and officially impose reciprocal tariffs accordingly, expanding the frontlines of the tariff war comprehensively. The U.S. daily Washington Post (WP), citing three sources, reported that the White House is considering imposing a 20% tariff on most products imported into the U.S. However, a final decision has not yet been made. The day before the reciprocal tariff announcement, the U.S. Trade Representative (USTR) released the 'National Trade Estimate Report (NTE Report)' detailing trade barriers of various countries, pointing out numerous tariff and non-tariff trade barriers of major trading partners including Korea. This report could be used as a basis for imposing reciprocal tariffs on countries and may become a contentious issue in trade negotiations at any time.
Additionally, President Trump has announced plans to impose item-specific tariffs on semiconductors, pharmaceuticals, and lumber in the future. Copper tariffs may also be announced within weeks. Reciprocal tariffs are not the 'end' but rather another 'beginning' of the tariff war.
Due to tariff uncertainties, the New York stock market has been on a roller coaster ride. The S&P 500 Index fell to its lowest level in six months the previous day but rebounded as investors flocked to dividend stocks and technology stocks recovered their losses. The major indices also showed poor performance in the first quarter of this year. The S&P 500 Index fell 4.6% during this period, and the Nasdaq Index dropped 10%. Both indices recorded their largest quarterly declines since 2022. The Dow Index fell 1.3% in the first quarter.
Laura Cooper, global investment strategist at global asset management firm Nuveen, commented on reciprocal tariffs, saying, "Investors are wrestling with what might be announced this week," and "The range of possible outcomes is so wide that traders are struggling with how to price in potential results."
Investors are closely watching President Trump’s reciprocal tariff announcement while also awaiting a slew of employment data this week. Starting with the U.S. Department of Labor’s February Job Openings and Labor Turnover Survey (JOLTs) report on this day, the private labor market research firm ADP will release its March employment report on the 2nd, and weekly initial jobless claims data will be released on the 3rd. The Department of Labor’s March employment report, which includes both private and public sector employment numbers and is a highly reliable indicator of overall labor market health, will be released on the 4th. Nonfarm payrolls are expected to increase by 139,000 this month, below February’s figure of 151,000. The unemployment rate is expected to remain steady at 4.1% from the previous month.
As investors flock to safe-haven government bonds, bond yields are falling, especially for long-term maturities. The 10-year U.S. Treasury yield, a global bond yield benchmark, fell 9 basis points (1 bp = 0.01 percentage points) from the previous trading day to 4.15%, while the 2-year U.S. Treasury yield, sensitive to monetary policy, declined 2 basis points to 3.88%.
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