Breakfast | Nasdaq futures plummet over 4%, Trump imposes a 10% "baseline tariff" on all countries and a 34% tariff on China

U.S. Stock Market After Hours: Blood and Thunder

After hours in the U.S. stock market, tariffs far exceeded expectations, causing a massive shock in the financial markets:

U.S. stock futures plummeted, with S&P 500 futures down 3.5% and Nasdaq futures down 4.3%. Apple fell over 7% after hours, Tesla dropped 4.8%, and Nvidia fell 4.3%.

Oil prices plunged by about $2.5, turning to a decline of 1.5%. Spot gold remained stable. COMEX copper futures fell 4.2% in the Asia-Pacific session.

The dollar fell 0.5% against the yen. Bitcoin retreated over $5,000 from its high after hours in the U.S. stock market.

“Tariff Club” Falls, Exceeding Expectations

Trump announced a national emergency, imposing comprehensive tariffs, setting a 10% "minimum baseline tariff," with higher tariffs on countries with the largest trade deficits with the U.S. According to CCTV News, Trump announced a national emergency on Wednesday, with a White House statement indicating that he would impose a 10% "baseline tariff" on all countries, effective at 12:01 AM Eastern Time on April 5. Higher reciprocal tariffs on countries with significant trade deficits with the U.S. will take effect at 12:01 AM Eastern Time on April 9. Steel, aluminum, automobiles, gold bars, copper, pharmaceuticals, semiconductors, and wood products are exempt from reciprocal tariffs; products from Canada and Mexico that comply with the United States-Mexico-Canada Agreement (USMCA) will continue to be exempt from tariffs. Trump stated that a 25% automobile tariff will take effect on April 3.

According to charts released by the White House, the U.S. will impose a 10% tariff on imports from the UK, Australia, Brazil, Saudi Arabia, the UAE, and Kuwait, a 17% tariff on Israeli goods, a 20% tariff on EU goods, a 24% tariff on Japanese goods, a 25% tariff on South Korean goods, a 26% tariff on Indian goods, 34% on China, a 36% tariff on Thai goods, a 39% tariff on Iraqi goods, a 46% tariff on Vietnamese goods, and a 49% tariff on Cambodian goods, the highest rate.

Countermeasures Emerge

In response to Trump's "reciprocal tariff" plan, several countries and regions have begun to formulate countermeasures, including retaliatory actions.

European Commission President Ursula von der Leyen stated that the EU is prepared with a "strong retaliation plan," including countermeasures against U.S. large technology companies and other service exports. The EU's countermeasures will focus on the U.S. service export sector. According to European Commission data, in 2023, the EU had a trade surplus of €157 billion with the U.S. in goods, but a deficit of €109 billion in services.

Canadian Prime Minister Mark Carney stated that if Trump fulfills his "reciprocal tariff" promise, Canada plans to implement retaliatory tariffs on U.S. goods this week. Carney warned that the relationship between Canada and the U.S. has fundamentally changed, and Canada has "multiple measures available to respond."Japanese Prime Minister Shigeru Ishiba stated that Japan will make every effort to promote the exemption of automobile tariffs and will take necessary measures to mitigate the impact of tariffs on the economy and employment.

UK Prime Minister Keir Starmer said that the UK will not respond to the measures announced by Trump with "knee-jerk reactions," but he "keeps all options on the table." Negotiations for economic agreements between the US and the UK are also in the "advanced stages," but he did not provide a specific timeline for the progress of the negotiations.

On April 2 local time, European Council President Charles Michel stated that the EU must respond to the "serious mistake" made by US President Trump regarding tariffs in a "firm but wise" manner.

Michel warned that a trade war between the EU and the US would "affect everyone." The EU must respond to Trump's upcoming tariff policies in a "firm but wise way." At the same time, he hopes that Trump can retract his plans before a devastating trade war breaks out.

Analyst Opinions

Wall Street is unanimously bearish: US stock sell-off will escalate, volatility comparable to the US elections!

John Tully from Bank of America stated that the S&P 500 index could fall below 5,500 points; a recent report from UBS indicated that if the White House implements a 20% tariff, the index could drop to 5,400 points. Even the three most optimistic bulls on Wall Street have admitted that their predictions for the index this year were overly optimistic.

Wedbush: The massive tariff measures launched by Trump on Wednesday will have a worse impact on the market than expected

"We characterize this series of tariffs as 'worse than the worst-case scenario the market is worried about.'" He added that due to the impact of tariffs, technology stocks will face "significant" pressure, and investors are anxious about demand destruction and supply chains. Concerns for Nvidia (NVDA.O) and other chip companies with significant supply chain relationships will be about pricing and profit margins, as well as what this means for future global supply chains. Apple (AAPL.O) is also worth watching, as most of the company's iPhone production is done overseas.

US Treasury Secretary: Tariff policies will have an impact on the economy similar to the oil crisis

Former US Treasury Secretary Larry Summers stated that the Trump administration's tariff policies will have an impact on the economy similar to the oil crisis, weakening US production capacity while driving up prices and increasing unemployment. This is a typical supply-side shock. The only question is how much damage it will cause. He also cited research on the tariffs imposed during Trump's first term, noting that these policies almost raised the prices faced by US consumers on a "dollar-for-dollar" basis.

Goldman Sachs: The yen is the "best choice" to hedge against US recession and tariffs

Goldman Sachs believes that the yen performs best when US real interest rates and the US stock market decline simultaneously. The yen is expected to rise to the lower end of the 140 range this year, an increase of about 7% from current levels, and a series of upcoming US economic data is also expected to boost the yen. Additionally, analysts suggest that rising tariff risks and narrowing US-Japan interest rate differentials are likely to benefit the yen

Key Stocks

Tesla's Q1 Deliveries Fall Short of Expectations

Musk's stock price rebounded after rumors of his departure from DOGE, falling over 6.4% before closing up 5.31%! Tesla's Q1 deliveries were 336,681 vehicles, a 13% year-on-year decline, marking the lowest since 2022. The drop in deliveries was mainly influenced by the Model Y facelift and Musk's controversial remarks globally. Subsequently, Politico reported that Musk would step down from his DOGE advisory role in a few weeks, leading to a surge in Tesla's stock during the session. Near the close of U.S. stocks, Musk himself called the Politico news fake, and a White House spokesperson confirmed that the news was untrue but stated that Musk would leave public office upon completing his mission. Tesla maintained its upward trend, ultimately closing up 5.31%.

Trump Announces Implementation of So-Called Reciprocal Tariffs, Apple Loses $1.8 Trillion

Apple's stock plummeted 7.5% after hours, with a market value evaporating by over $25 billion (approximately RMB 1.8 trillion).

Three analysts from Citigroup indicated that President Trump's retaliatory tariffs could impact Apple's gross margins. Assuming Apple cannot obtain an exemption this time and faces a cumulative 54% tariff from the U.S. on China without passing it on, this could negatively affect the company's overall gross margin by about 9%, the analysts pointed out. Citigroup estimates that Apple's current manufacturing proportion in China exceeds 90%