Latest news with #NationwideFinancial
CNBC
01-08-2025
- Business
- CNBC
Wall Street stumbles into August — a historically weak season for stocks — with a new worry emerging
The near-term outlook suddenly looks precarious for a stock market that's near all-time highs, even after Friday's big sell-off. Next week, investors will continue to act on what they learned this week. On the one hand, the artificial intelligence story that's powered the stock market rally the last several months remains intact, with Microsoft this week becoming the second public company ever in the U.S. to hit a $4 trillion valuation after its strong June quarter results. On the other, it now turns out the U.S. labor market weakened significantly the past three months as tariffs moved higher. "Signs of fatigue are surfacing," wrote Mark Hackett, chief market strategist at Nationwide Financial. "Elevated valuations, softening performance and the onset of a historically weak seasonal stretch could test investors' conviction in the weeks ahead." On Friday, stocks were headed for a losing week. The Dow Jones Industrial Average slid about 3% in the latest five days. The S & P 500 and Nasdaq Composite were off by more than 2%, each. After leaving rates unchanged last week, the Federal Reserve remains in wait-and-see-mode until September, by which time the central bank will have another two months of inflation and labor market data to gauge the effect of higher tariffs. Investors are walking that tightrope while navigating what is historically a weak season for stocks. According to the Stock Trader's Almanac, August is the worst month for the Dow Jones Industrial Average in data going back to 1988, and the second worst for the S & P 500 and Nasdaq Composite. In fact, the S & P 500′s total monthly returns for August and September since 1990 averaged a decline of 0.3% and 0.7%, respectively, according to Wolfe Research. Tariffs With little on the calendar next week, investors are likely to turn their attention to the minute-by-minute changes on tariffs, among other events. Trump on Thursday signed an executive order that adjusted "reciprocal" tariffs on a host of countries, with new duties ranging from 10% to 41%. That latest round of updates raises the effective tariff rate across the entire economy to a range between 15% and 20%. While that is lower than the range of 25% or more that would have resulted from the initial April 2 announcement, it's higher than the 10% baseline markets were pricing in just several weeks ago — and far above the 2% rate that prevailed at the start of the year. With trade deals far from over, more market observers are proceeding with caution . The eventual results of U.S. negotiations with China are one key focus, given that rare earths metals and magnets that power everything from electric vehicles to data centers are the major bargaining chip for Beijing . "Tariffs, number one, is what's going to be driving the news cycle, as well as the market direction in conjunction," said Charlie Ashley, portfolio manager at Catalyst Funds. Earnings The second quarter earnings season also continues to run at high gear. Thus far, of the 331 S & P 500 companies that have reported, more than 82% issues positive surprises. As of Aug. 1, the blended second quarter earnings growth rate for the S & P 500 is now 10.2%, double the 4.9% that was projected at the end of the June, according to FactSet data. Several S & P 500 companies will report results next week that will give investors further insight into the AI story, as well as into the health of consumer spending. Catalyst Funds' Ashley said he's paying particular attention to Palantir Technologies and Advanced Micro Devices . Consumer giants such as Walt Disney will also be reporting, as will major industrials, such as Caterpillar . Week ahead calendar All times ET. Monday, Aug. 4 10:00 a.m. Durable Orders final (June) 10:00 a.m. Factory Orders (June) Earnings: Palantir Technologies , Vertex Pharmaceuticals , Axon Enterprise , Simon Property Group , Diamondback Energy , Coterra Energy , Tyson Foods , Loews , ON Semiconductor Tuesday, Aug. 5 8:30 a.m. Trade Balance (June) 9:45 a.m. PMI Composite final (July) 9:45 a.m. S & P PMI Services final (July) 10:00 a.m. ISM Services PMI (July) Earnings: News Corp. , Devon Energy , Arista Networks , Amgen , Super Micro Computer , Match Group , Advanced Micro Devices , Yum! Brands , Marriott International , Fidelity National Information Services , Duke Energy , Pfizer , Molson Coors Beverage , Caterpillar , Marathon Petroleum , Apollo Global Management , Archer-Daniels-Midland Wednesday, Aug. 6 Earnings: CF Industries , Costco Wholesale , TKO Group , Paycom Software , Fortinet , Uber Technologies , Occidental Petroleum , MetLife , DoorDash , Airbnb , Rockwell Automation , McDonald's , Emerson Electric , Walt Disney Thursday, Aug. 7 8:30 a.m. Continuing Jobless Claims (07/26) 8:30 a.m. Initial Claims (08/02) 8:30 a.m. Unit Labor Costs preliminary (Q2) 8:30 a.m. Productivity preliminary (Q2) 10:00 a.m. Wholesale Inventories final (June) 3:00 p.m. Consumer Credit (June) Earnings: Live Nation Entertainment , Block , Take-Two Interactive Software , GoDaddy , Wynn Resorts , Gilead Sciences , Trade Desk , Insulet , Expedia Group , Motorola Solutions , Microchip Technology , Akamai Technologies , Ralph Lauren , Parker-Hannifin , Warner Bros. Discovery , ConocoPhillips , Martin Marietta Materials , Eli Lilly , Zimmer Biomet Holdings , EPAM Systems , Kenvue , Constellation Energy Friday, Aug. 8
Asharq Al-Awsat
04-04-2025
- Business
- Asharq Al-Awsat
Trump's Tariff Push Is a Race against Time, and Potential Voter Backlash
President Donald Trump's expansive new tariffs reverse a decades-long global trend of lower trade barriers and are likely, economists say, to raise prices for Americans by thousands of dollars each year while sharply slowing the US economy. The White House is gambling that other countries will also suffer enough pain that they will open up their economies to more American exports, leading to negotiations that would reduce the tariffs imposed Wednesday. Or, the White House hopes, companies will reverse their moves toward global supply chains and bring more production to the United States to avoid higher import taxes. How will Americans react? But a key question for the Trump administration will be how Americans react to the tariffs. If prices rise noticeably and jobs are lost, voters could turn against the duties and make it harder to keep them in place for the time needed to encourage companies to return to the US. The Yale Budget Lab estimates the Trump administration's tariffs would cost the average household $3,800 in higher prices this year. That includes the 10% universal tariff plus much higher tariffs on about 60 countries announced Wednesday, as well as previous import taxes on steel, aluminum and cars. Inflation could top 4% this year, from 2.8% currently, while the economy may barely grow, according to estimates by Nationwide Financial. Investors turned thumbs-down on the new duties Thursday, with the S&P 500 index dropping 4.8% at the close of trading, its worst day since the pandemic. The Dow Jones Industrial Average plunged more than 1,600 points. Still, Trump was upbeat Thursday when asked about the stock market drop. "I think it's going very well," he said. "We have an operation, like when a patient gets operated on and it's a big thing. I said this would exactly be the way it is." The average US tariff could rise to nearly 25% when the tariffs are fully implemented April 9, economists estimate, higher than in more than a century, and higher than the 1930 Smoot-Hawley tariffs that are widely blamed for worsening the Great Depression. "The president just announced the de facto separation of the US economy from the global economy," said Mary Lovely, senior fellow at the Peterson Institute for International Economics. "The stage is set for higher prices and slower growth over the long term." Commerce Secretary Howard Lutnick argued the policies will help open markets overseas for US exports. "I expect most countries to start to really examine their trade policy towards the United States of America, and stop picking on us," he said on CNBC Thursday. "This is the reordering of fair trade." Bob Lehmann, 73, who stopped by a Best Buy in Portland, Oregon, Wednesday opposed the tariffs. "They're going to raise prices and cause people to pay more for daily living," he said. Mathew Hall, a 64-year-old paint contractor, called the tariffs a "great idea" and said potential price increases in the short term were worth it. "I believe in the long term, it's going to be good," he said, adding that he felt the US had been taken advantage of. But a former trade official from Trump's first term, speaking on condition of anonymity to talk candidly about the impact, suggested that Americans, including those who voted for Trump, may have difficulty accepting the stiff duties. Americans "have never faced tariffs like this," the former official said Thursday. "The downstream impact on clothing and shoe stores, it's going to be pretty significant. So we'll have to see how the Trump voters view this ... and how long their support for these policies goes." On Thursday, automaker Stellantis, which owns the Jeep, Citroen and Ram brands, said it would temporarily halt production at plants in Canada and Mexico in response to Trump's 25% tax on imported cars. The reduced output means the company is temporarily laying off 900 workers at plants in Michigan and Indiana. Some exporters overseas may cut their prices to offset some of the tariffs, and US retailers could eat some of the cost as well. But most economists expect much of the tariffs to bring higher prices. The tariffs will hit many Asian countries hard, with duties on Vietnamese imports rising to 46% and on Indonesia to 32%. Tariffs on some Chinese imports will be as high as 79%. Those three countries are the top sources of US shoe imports, with Nike making about half its shoes last year and one-third of its clothes in Vietnam. The Yale Budget Lab estimates all Trump's tariffs this year will push clothing prices 17% higher. On Thursday, the Home Furnishings Association, which represents more than 13,000 US furniture stores, predicted the tariffs will increase prices between 10% and 46%. Vietnam and China are the top furniture exporters to the US. It said manufacturers in Asia are offsetting some of the costs by discounting their products and lowering ocean freight rates, but that won't be enough to avoid price hikes. Even domestically made furniture often relies on imported components. "While many in the industry support the long-term goal of reshoring manufacturing, the reality is that it will take at least a decade to scale domestic production," Home Furnishings Association CEO Shannon Williams said in a statement. "Permitting, training a skilled workforce and managing the higher costs of US manufacturing are significant hurdles." At Gethsemane Garden Center in Chicago, there are Canadian-grown tulip, daffodil and hyacinth bulbs, though only about 5% of center plants are imported. Thousands of lemon cypress trees from Canada are sold year-round and Canadian mums are sold in the fall. Regas Chefas, whose family has owned Gethsemane for decades, says all the tariffs won't be passed onto customers. "We're going to absorb some of the increase. The growers will absorb some of the increases and then the customers will pay a little bit higher price," he said. The Consumer Brands Association, which represents Coca-Cola, General Mills, Nestle, Tyson and Del Monte as well as Procter & Gamble and Colgate-Palmolive, said its companies already make the majority of their goods in the US. But there are critical ingredients and inputs — like wood pulp for toilet paper — that are imported because of scarce domestic availability. Cinnamon is harvested from trees that can't survive in the US. Domestic production of coffee and cocoa is also limited. "We encourage President Trump and his trade advisers to fine-tune their approach and exempt key ingredients and inputs in order to protect manufacturing jobs and prevent unnecessary inflation at the grocery store," said Tom Madrecki, the association's vice president of supply chain resiliency. Outside a Tractor Supply south of Denver, two family members on opposite sides of the political spectrum debated the tariffs. Chris Theisen, a 62-year-old Republican, said: "I feel a good change coming on, I feel it's going to be hard, but you don't go to the gym and walk away and say, 'God, I feel great." Nayen Shakya, a Democrat and Theisen's great nephew, said higher prices are already a hardship. At the restaurant where he works, menu prices have been raised to account for higher ingredient costs. "It's really easy sometimes to say some things in a vague way that everyone can agree with that is definitely more complex under the surface," said Shakya. "The burden of the increased prices is already going to the consumer." Listening to his nephew, Theisen added: "I understand this side of it, too." "I ain't got no crystal ball. I hope it works out good."
Chicago Tribune
03-04-2025
- Business
- Chicago Tribune
President Trump's tariff push is a race against time — and potential voter backlash
WASHINGTON — President Donald Trump's expansive new tariffs reverse a decades-long global trend of lower trade barriers and are likely, economists say, to raise prices for Americans by thousands of dollars each year while sharply slowing the U.S. economy. The White House is gambling that other countries will also suffer enough pain that they will open up their economies to more American exports, leading to negotiations that would reduce the tariffs imposed Wednesday. Or, the White House hopes, companies will reverse their moves toward global supply chains and bring more production to the United States to avoid higher import taxes. A key question remains: How will Americans react? But a key question for the Trump administration will be how Americans react to the tariffs. If prices rise noticeably and jobs are lost, voters could turn against the duties and make it harder to keep them in place for the time needed to encourage companies to return to the U.S. The Yale Budget Lab estimates the Trump administration's tariffs would cost the average household $3,800 in higher prices this year. That includes the 10% universal tariff plus much higher tariffs on about 60 countries announced Wednesday, as well as previous import taxes on steel, aluminum and cars. Inflation could top 4% this year, from 2.8% currently, while the economy may barely grow, according to estimates by Nationwide Financial. Investors turned thumbs-down on the new duties Thursday, with the S&P 500 index dropping 4.8% at the close of trading, its worst day since the pandemic. The Dow Jones plunged more than 1,600 points. Still, Trump was upbeat Thursday when asked about the stock market drop. 'I think it's going very well,' he said. 'We have an operation, like when a patient gets operated on and it's a big thing. I said this would exactly be the way it is.' The average U.S. tariff could rise to nearly 25% when the tariffs are fully implemented April 9, economists estimate, higher than in more than a century, and higher than the 1930 Smoot-Hawley tariffs that are widely blamed for worsening the Great Depression. 'The president just announced the de facto separation of the U.S. economy from the global economy,' said Mary Lovely, senior fellow at the Peterson Institute for International Relations. 'The stage is set for higher prices and slower growth over the long term.' Commerce Secretary Howard Lutnick said the policies will help open markets overseas for U.S. exports. 'I expect most countries to start to really examine their trade policy towards the United States of America, and stop picking on us,' he said on CNBC Thursday. 'This is the reordering of fair trade.' Mixed feelings among Americans so far Bob Lehmann, 73, stopped by a Best Buy in Portland, Oregon, to buy a keyboard Wednesday. He opposed the tariffs. 'They're going to raise prices and cause people to pay more for daily living,' he said. Mathew Hall, a 64-year-old paint contractor, said he thought the tariffs were a 'great idea' and that potential price increases in the short term were worth it. 'I believe in the long term, it's going to be good,' he said, adding that he felt the U.S. had been taken advantage of. But a former trade official from Trump's first term, speaking on condition of anonymity to talk candidly about the impact, suggested that Americans, including those who voted for Trump, may have difficulty accepting the stiff duties. Americans 'have never faced tariffs like this,' the former official said Thursday. 'The downstream impact on clothing and shoe stores, it's going to be pretty significant. So we'll have to see how the Trump voters view this … and how long their support for these policies goes.' On Thursday, automaker Stellantis, which owns the Jeep, Citroen and Ram brands, said it would temporarily halt production at plants in Canada and Mexico in response to Trump's 25% tax on imported cars. The reduced output means the company is temporarily laying off 900 workers at plants in Michigan and Indiana. Some exporters overseas may cut their prices to offset some of the tariffs, and U.S. retailers could eat some of the cost as well. But most economists expect much of the tariffs to feed through to higher prices. Clothing, shoes, furniture could get more expensive The tariffs will hit many Asian countries hard, with duties on Vietnamese imports rising to 46% and on Indonesia to 32%. Tariffs on some Chinese imports will be as high as 79%. Those three countries are the top sources of U.S. shoe imports, with Nike making about half its shoes last year and one-third of its clothes in Vietnam. The Yale Budget Lab estimates all Trump's tariffs this year will push clothing prices 17% higher. On Thursday, the Home Furnishings Association, which represents more than 13,000 U.S. furniture stores, predicted the tariffs will increase prices between 10% and 46%. Vietnam and China are the top furniture exporters to the U.S. It said manufacturers in Asia are offsetting some of the costs by discounting their products and lowering ocean freight rates, but that won't be enough to avoid price hikes. Even domestically made furniture often relies on imported components. 'While many in the industry support the long-term goal of reshoring manufacturing, the reality is that it will take at least a decade to scale domestic production,' Home Furnishings Association CEO Shannon Williams said in a statement. 'Permitting, training a skilled workforce and managing the higher costs of U.S. manufacturing are significant hurdles.' At Gethsemane Garden Center in Chicago, there are Canadian-grown tulip, daffodil and hyacinths bulbs, though only about 5% of their plants are imported. Thousands of lemon cypress trees from Canada are sold year-round and Canadian mums are sold in the fall. Regas Chefas, whose family has owned the center for decades, says all the tariffs won't be passed onto customers. 'We're going to absorb some of the increase. The growers will absorb some of the increases and then the customers will pay a little bit higher price,' he said. The Consumer Brands Association, which represents Coca-Cola, General Mills, Nestle, Tyson and Del Monte as well as Procter & Gamble and Colgate-Palmolive, said its companies already make the majority of their goods in the U.S. But there are critical ingredients and inputs — like wood pulp for toilet paper — that are imported because of scarce domestic availability. Cinnamon is harvested from trees that can't survive in the U.S.. Domestic production of coffee and cocoa is also limited. 'We encourage President Trump and his trade advisers to fine-tune their approach and exempt key ingredients and inputs in order to protect manufacturing jobs and prevent unnecessary inflation at the grocery store,' said Tom Madrecki, the association's vice president of supply chain resiliency. Outside a Tractor Supply in Castle Rock, south of Denver, two family members on opposite sides of the political spectrum debated the tariffs. Chris Theisen, 62 and a Republican, was enthused about the tariffs. 'I feel a good change coming on, I feel it's going to be hard, but you don't go to the gym and walk away and say, 'God, I feel great,' he said. Nayen Shakya, a Democrat and Theisen's great nephew, said higher prices are already a hardship. At the restaurant where he works, menu prices have been raised to account for higher ingredient costs in recent weeks. 'It's really easy sometimes to say some things in a vague way that everyone can agree with that is definitely more complex under the surface,' said Shakya. 'The burden of the increased prices is already going to the consumer.' Listening to his nephew, Theisen added: 'I understand this side of it, too.' 'I ain't got no crystal ball. I hope it works out good.' AP Writers Paul Wiseman, Jesse Bedayn, Dee-Ann Durbin, and Claire Rush contributed to this report. Rush reported from Portland, Durbin from Detroit, and Bedayn from Colorado. AP Photographer Erin Hooley contributed from Chicago.
Washington Post
03-04-2025
- Business
- Washington Post
Trump's tariff push is a race against time, and potential voter backlash
WASHINGTON — President Donald Trump's expansive new tariffs reverse a decades-long global trend of lower trade barriers and are likely, economists say, to raise prices for Americans by thousands of dollars each year while sharply slowing the U.S. economy. The White House is gambling that other countries will also suffer enough pain that they will open up their economies to more American exports, leading to negotiations that would reduce the tariffs imposed Wednesday. Or, the White House hopes, companies will reverse their moves toward global supply chains and bring more production to the United States to avoid higher import taxes. But a key question for the Trump administration will be how Americans react to the tariffs. If prices rise noticeably and jobs are lost, voters could turn against the duties and make it harder to keep them in place for the time needed to encourage companies to return to the U.S. The Yale Budget Lab estimates the Trump administration's tariffs would cost the average household $3,800 in higher prices this year. That includes the 10% universal tariff plus much higher tariffs on about 60 countries announced Wednesday, as well as previous import taxes on steel, aluminum and cars . Inflation could top 4% this year, from 2.8% currently , while the economy may barely grow, according to estimates by Nationwide Financial. Investors turned thumbs-down on the new duties Thursday, with the S&P 500 index dropping 4.8% at the close of trading, its worst day since the pandemic. The Dow Jones plunged more than 1,600 points. Still, Trump was upbeat Thursday when asked about the stock market drop. 'I think it's going very well,' he said. 'We have an operation, like when a patient gets operated on and it's a big thing. I said this would exactly be the way it is.' The average U.S. tariff could rise to nearly 25% when the tariffs are fully implemented April 9, economists estimate, higher than in more than a century, and higher than the 1930 Smoot-Hawley tariffs that are widely blamed for worsening the Great Depression. 'The president just announced the de facto separation of the U.S. economy from the global economy,' said Mary Lovely, senior fellow at the Peterson Institute for International Relations. 'The stage is set for higher prices and slower growth over the long term.' Commerce Secretary Howard Lutnick said the policies will help open markets overseas for U.S. exports. 'I expect most countries to start to really examine their trade policy towards the United States of America, and stop picking on us,' he said on CNBC Thursday. 'This is the reordering of fair trade.' Bob Lehmann, 73, stopped by a Best Buy in Portland, Oregon, to buy a keyboard Wednesday. He opposed the tariffs. 'They're going to raise prices and cause people to pay more for daily living,' he said. Mathew Hall, a 64-year-old paint contractor, said he thought the tariffs were a 'great idea' and that potential price increases in the short term were worth it. 'I believe in the long term, it's going to be good,' he said, adding that he felt the U.S. had been taken advantage of. But a former trade official from Trump's first term, speaking on condition of anonymity to talk candidly about the impact, suggested that Americans, including those who voted for Trump, may have difficulty accepting the stiff duties. Americans 'have never faced tariffs like this,' the former official said Thursday. 'The downstream impact on clothing and shoe stores, it's going to be pretty significant. So we'll have to see how the Trump voters view this ... and how long their support for these policies goes.' On Thursday, automaker Stellantis, which owns the Jeep, Citroen and Ram brands, said it would temporarily halt production at plants in Canada and Mexico in response to Trump's 25% tax on imported cars. The reduced output means the company is temporarily laying off 900 workers at plants in Michigan and Indiana. Some exporters overseas may cut their prices to offset some of the tariffs, and U.S. retailers could eat some of the cost as well. But most economists expect much of the tariffs to feed through to higher prices. The tariffs will hit many Asian countries hard, with duties on Vietnamese imports rising to 46% and on Indonesia to 32%. Tariffs on some Chinese imports will be as high as 79%. Those three countries are the top sources of U.S. shoe imports, with Nike making about half its shoes last year and one-third of its clothes in Vietnam. The Yale Budget Lab estimates all Trump's tariffs this year will push clothing prices 17% higher. On Thursday, the Home Furnishings Association, which represents more than 13,000 U.S. furniture stores, predicted the tariffs will increase prices between 10% and 46%. Vietnam and China are the top furniture exporters to the U.S. It said manufacturers in Asia are offsetting some of the costs by discounting their products and lowering ocean freight rates, but that won't be enough to avoid price hikes. Even domestically made furniture often relies on imported components. 'While many in the industry support the long-term goal of reshoring manufacturing, the reality is that it will take at least a decade to scale domestic production,' Home Furnishings Association CEO Shannon Williams said in a statement. 'Permitting, training a skilled workforce and managing the higher costs of U.S. manufacturing are significant hurdles.' At Gethsemane Garden Center in Chicago, there are Canadian-grown tulip, daffodil and hyacinths bulbs, though only about 5% of their plants are imported. Thousands of lemon cypress trees from Canada are sold year-round and Canadian mums are sold in the fall. Regas Chefas, whose family has owned the center for decades, says all the tariffs won't be passed onto customers. 'We're going to absorb some of the increase. The growers will absorb some of the increases and then the customers will pay a little bit higher price,' he said. The Consumer Brands Association, which represents Coca-Cola, General Mills, Nestle, Tyson and Del Monte as well as Procter & Gamble and Colgate-Palmolive, said its companies already make the majority of their goods in the U.S. But there are critical ingredients and inputs — like wood pulp for toilet paper — that are imported because of scarce domestic availability. Cinnamon is harvested from trees that can't survive in the U.S.. Domestic production of coffee and cocoa is also limited. 'We encourage President Trump and his trade advisers to fine-tune their approach and exempt key ingredients and inputs in order to protect manufacturing jobs and prevent unnecessary inflation at the grocery store,' said Tom Madrecki, the association's vice president of supply chain resiliency. Outside a Tractor Supply in Castle Rock, south of Denver, two family members on opposite sides of the political spectrum debated the tariffs. Chris Theisen, 62 and a Republican, was enthused about the tariffs. 'I feel a good change coming on, I feel it's going to be hard, but you don't go to the gym and walk away and say, 'God, I feel great,' he said. Nayen Shakya, a Democrat and Theisen's great nephew, said higher prices are already a hardship. At the restaurant where he works, menu prices have been raised to account for higher ingredient costs in recent weeks. 'It's really easy sometimes to say some things in a vague way that everyone can agree with that is definitely more complex under the surface,' said Shakya. 'The burden of the increased prices is already going to the consumer.' Listening to his nephew, Theisen added: 'I understand this side of it, too.' 'I ain't got no crystal ball. I hope it works out good.' ___ AP Writers Paul Wiseman, Jesse Bedayn, Dee-Ann Durbin, and Claire Rush contributed to this report. Rush reported from Portland, Durbin from Detroit, and Bedayn from Colorado. AP Photographer Erin Hooley contributed from Chicago.
The Independent
03-04-2025
- Business
- The Independent
Trump's tariff push is a race against time, and potential voter backlash
President Donald Trump 's expansive new tariffs reverse a decades-long global trend of lower trade barriers and are likely, economists say, to raise prices for Americans by thousands of dollars each year while sharply slowing the U.S. economy. The White House is gambling that other countries will also suffer enough pain that they will open up their economies to more American exports, leading to negotiations that would reduce the tariffs imposed Wednesday. Or, the White House hopes, more companies — both American and foreign — will reverse their moves toward global supply chains and bring more production to the United States to avoid higher import taxes. A key question remains: How will Americans react? But a key question for the Trump administration will be how Americans react to the tariffs. If prices rise noticeably and jobs are lost, voters could turn against the duties and make it harder to keep them in place for the time needed to encourage companies to return to the U.S. The Yale Budget Lab estimates the Trump administration's tariffs would cost the average household $3,800 in higher prices this year. The figure includes the impact of the 10% universal tariff announced Wednesday, plus much higher tariffs on about 60 countries, as well as previous import taxes on steel, aluminum and cars. Inflation could top 4% this year, from 2.8% currently, while the economy may barely grow, according to estimates by Nationwide Financial. Investors turned thumbs-down on the new duties Thursday, with the broad S&P 500 index dropping 4.8% at the close of trading, its worst day since the pandemic. The Dow Jones plunged more than 1,600 points. The only sector not selling off was consumer staples, which consists of companies that sell basic food stocks. Still, Trump offered an upbeat reaction Thursday when asked about the stock market drop as he left the White House to fly to his Florida golf club. 'I think it's going very well,' he said. 'We have an operation, like when a patient gets operated on and it's a big thing. I said this would exactly be the way it is." The average U.S. tariff could rise to nearly 25% when the tariffs are fully implemented April 9, economists estimate, higher than it has been in more than a century and higher than the 1930 Smoot-Hawley tariffs that are widely blamed for worsening the Great Depression. Economists note that the United States engages in much more trade now than it did then. 'The president just announced the de facto separation of the U.S. economy from the global economy,' said Mary Lovely, senior fellow at the Peterson Institute for International Relations. 'The stage is set for higher prices and slower growth over the long term." Commerce Secretary Howard Lutnick, in an interview on CNBC Thursday, said the policies will help open markets overseas for U.S. exports. 'I expect most countries to start to really examine their trade policy towards the United States of America, and stop picking on us,' he said. 'This is the reordering of fair trade.' Mixed feelings among Americans so far Bob Lehmann, 73, stopped by a Best Buy in Portland, Oregon, to buy a keyboard Wednesday. He opposed the tariffs. 'They're going to raise prices and cause people to pay more for daily living,' he said. Mathew Hall, a 64-year-old paint contractor, said he thought the tariffs were a 'great idea' and that potential price increases in the short term were worth it. 'I believe in the long term, it's going to be good,' he said, adding that he felt the U.S. had been taken advantage of. But a former trade official from Trump's first term, speaking on condition of anonymity to talk candidly about the impact, suggested that Americans, including those who voted for Trump, may have difficulty accepting the stiff duties. Americans 'have never faced tariffs like this,' the former official said Thursday. 'The downstream impact on clothing and shoe stores, it's going to be pretty significant. So we'll have to see how the Trump voters view this ... and how long their support for these policies goes.' On Thursday, automaker Stellantis, which owns the Jeep, Citroen and Ram brands, said it would temporarily halt production at a plant in Canada and another in Mexico in response to Trump's 25% tax on imported cars. The reduced output also means the company is temporarily laying off 900 workers at plants in Michigan and Indiana. Some exporters overseas may cut their prices to offset some of the tariffs, and U.S. retailers could eat some of the cost as well. But most economists do expect much of the tariffs to feed through to higher prices. Clothing, shoes, furniture could see price rises The tariffs will hit many Asian countries particularly hard, with duties on Vietnamese imports rising to 46% and on goods from Indonesia to 32%. Tariffs on some Chinese imports will now be as high as 79%. Those three countries are the top sources of U.S. shoe imports, with Nike making about half its shoes last year and one-third of its clothes in Vietnam. The Yale Budget Lab estimates all Trump's tariffs this year will push clothing prices 17% higher. On Thursday, the Home Furnishings Association, which represents more than 13,000 U.S. furniture stores, predicted the tariffs will increase prices between 10% and 46%. Vietnam and China are the top furniture exporters to the U.S. The association said manufacturers in Asia are offsetting some of the costs by discounting their products and lowering ocean freight rates, but that won't be enough to avoid price hikes. Even domestically made furniture often relies on imported components, the association said. 'While many in the industry support the long-term goal of reshoring manufacturing, the reality is that it will take at least a decade to scale domestic production,' Home Furnishings Association CEO Shannon Williams said in a statement. 'Permitting, training a skilled workforce and managing the higher costs of U.S. manufacturing are significant hurdles.' The Consumer Brands Association, which represents big food companies like Coca-Cola, General Mills, Nestle, Tyson and Del Monte as well as consumer product makers like Procter & Gamble and Colgate-Palmolive, said its companies already make the majority of their goods in the U.S. But there are critical ingredients and inputs — like wood pulp for toilet paper — that must be imported because of scarce domestic availability. Cinnamon is harvested from trees that can't survive in the U.S., for example. Domestic production of coffee and cocoa is also limited. 'We encourage President Trump and his trade advisers to fine-tune their approach and exempt key ingredients and inputs in order to protect manufacturing jobs and prevent unnecessary inflation at the grocery store,' said Tom Madrecki, the association's vice president of supply chain resiliency. Outside a Tractor Supply store in Castle Rock, south of Denver, two family members on opposite sides of the political spectrum debated the tariffs. Chris Theisen, 62 and a Republican, was enthused about the tariffs, arguing they could bring jobs to America. 'I feel a good change coming on, I feel it's going to be hard, but you don't go to the gym and walk away and say, 'God, I feel great,' he said. Nayen Shakya, a Democrat and Theisen's great nephew, said higher prices are already a hardship. At the restaurant where he works, menu prices have been raised to account for higher ingredient costs, specifically rice, in recent weeks. 'It's really easy sometimes to say some things in a vague way that everyone can agree with that is definitely more complex under the surface,' said Shakya. "The burden of the increased prices is already going to the consumer.' Listening to his nephew, Theisen added, 'I understand this side of it, too,' he said. 'I ain't got no crystal ball. I hope it works out good.' ___ AP Writers Paul Wiseman, Jesse Bedayn, Dee-Ann Durbin, and Claire Rush contributed to this report. Rush reported from Portland, Durbin from Detroit, and Bedayn from Colorado.
