Fall of Wall Street: The Market's Decline Amidst New Tariffs by Trump

Recently, the global financial landscape was shaken by U.S. President Donald Trump's announcement of new tariffs on Canada, Mexico, and China. These tariffs have had a profound impact on Wall Street, with stocks experiencing significant declines on Monday and Tuesday. But what is Wall Street, and how are these tariffs affecting it?

Sources:istockphoto.com

What is Wall Street?

Wall Street is both a physical street in Manhattan and a metaphor for the U.S. financial sector, encompassing investment banks, securities traders, and other financial institutions. It symbolizes the people and places that govern the world of finance. Not only is the NYSE located on Wall Street, but there is also the Federal Reserve Bank of New York. Although most of these entities may have their headquarters in other cities, such as Chicago, Boston, and San Francisco. Despite this, the media often refers to the U.S. investment and financial industry as Wall Street or simply "The Street.".

Tariffs Announced by The United States

The tariffs that have been implemented by US President Donald Trump are:

Sources : CBS NEWS live 24/7 on 3 March 2025

• Mexico and Canada: A 25% tariff is imposed on almost all imports from these two countries, except for Canadian energy products which are subject to a 10% tariff.

• China: The tariff, which was originally 10%, is increased to 20% on all imports from China, in addition to the existing tariffs.

The tariff increase will have a significant impact on several important sectors such as the increase in the cost of various consumer goods, from groceries to cars, and could cause more financial stress for consumers tired of inflation.

Impact of New Tariffs on Investment Values and the Economy

The recent imposition of tariffs by the Trump administration has sent shockwaves through financial markets, leading to a notable decline in investment values across various sectors, particularly in technology stocks and cryptocurrencies.

• Decline in Investment Values

Investment in the technology sector has seen a sharp decline, with stocks down more than 7% since President Trump's re-election, largely due to rising manufacturing costs for companies like Apple and Nvidia that have large operations outside the U.S.. The imposition of tariffs has increased risk-averse sentiment among investors, leading to a massive sell-off in technology stocks. At the same time, the cryptocurrency market has also seen a sharp decline, with Bitcoin prices down around 10% to $83,700 as of March 4 after the tariff announcement, reflecting broader market uncertainty and investor skepticism. The crypto market's reaction was partly due to its correlation with equity markets and concerns about economic growth and inflation.

Sources:Apple Inc. chart market from finance.yahoo.com for 1 month

Sources: NVIDIA Corporation chart market from finance.yahoo.com for 1 month

Sources: Bitcoin market chart from coinmarketcap.com on 4 march

• Impact on Companies and the Economy

The introduction of tariffs will disrupt supply chains, increasing operating costs for companies that rely on international imports, thus pushing up consumer prices, as retailers such as Best Buy have acknowledged, warning about the impact of tariffs on the price of goods. While the White House argues that these measures will stimulate domestic manufacturing and create more jobs, investors remain concerned about the economic pressure and possible inflation. In addition, economic uncertainty is increasing as countries such as Canada and Mexico announce retaliatory measures, which are expected to further undermine business confidence and investment decisions.

• Volatility in Financial Markets

The imposition of tariffs will have an impact on the markets, which will experience significant volatility in the coming weeks. This can be seen in the S&P 500 and Nasdaq markets, which have recently been cautious as investors become more cautious. The increased uncertainty and the potential for further trade escalation will continue to weigh on market sentiment. These tariffs may pose a challenge to the economy in the short term, but the long-term impact is still unclear.Historically, protectionist measures have hindered growth in the near term but do not necessarily create lasting economic damage. However, ongoing trade tensions could continue to affect investor confidence and market stability.

Sources:S&P 500 chart market from finance.yahoo.com for 1 month

Source: NASDAQ chart market from finance.yahoo.com for 1 month

Conclusion

New tariffs imposed by President Donald Trump on Canada, Mexico, and China have sparked uncertainty in financial markets, leading to falls in major indexes such as the S&P 500 and Dow Jones. The technology and cryptocurrency sectors have also been negatively impacted, while consumers face the risk of higher prices and inflation. While the Trump administration argues that these tariffs will stimulate domestic industries, investors remain skeptical about the long-term economic benefits, especially with retaliation from major trading partners that could trigger a trade war. This uncertainty highlights the need for more cautious economic policies to stabilize markets and sustain growth.