US stocks took a sharp turn downward in after-hours trading on Wednesday as investors reacted to President Donald Trump’s announcement of sweeping tariffs that could escalate a growing trade war and disrupt the global economy. Dow futures plummeted more than 1,100 points, or 2.7%, while S&P 500 futures sank 3.9% and Nasdaq 100 futures plunged 4.7%. The selloff began as Trump unveiled his plan, holding up a chart that depicted how rates would increase for each country.

Market Reaction and Immediate Impact

US stocks had closed higher on Wednesday afternoon ahead of Trump’s announcement, but the selloff began as soon as the details of the tariffs were revealed. Key Asian stocks mostly sank shortly after opening on Thursday, hours after the broad-based tariffs were announced. Japan’s benchmark Nikkei 225 index tumbled at least 4%, South Korea’s KOSPI plunged 2.7%, and Hong Kong’s Hang Seng Index slid 2.4%. Taiwan’s TAIEX fluctuated since opening, with its current shares up less than 1%.

Wall Street had been nervous about Trump’s tariffs, though some analysts expected stocks could rally if the tariff announcement was lighter than feared. Those hopes were quickly dashed as Trump unveiled baseline 10% tariffs on all imports, plus higher rates for specific countries. “Trump is enacting a very aggressive tariff policy, far more aggressive than most investors thought possible six months ago,” said Jed Ellerbroek, portfolio manager at Argent Capital. “Painful times for stock market investors.”

Specific Tariffs and Market Leaders

The tariffs include a 10% rate on all imports, with higher rates for about 60 countries with significant trade deficits. China will face an additional 34% tariff, bringing its total rate to 54%, while the European Union will see a new 20% duty. Other countries, such as Vietnam (46%), Cambodia (49%), and Japan (24%), will also face substantial increases.

As stocks tanked, tech giants led the market lower. Apple (AAPL) tumbled more than 7% in after-hours trading, Tesla (TSLA) fell more than 6%, Amazon (AMZN) fell more than 5%, Nike (NKE) plunged 7%, and Walmart (WMT) fell 6%. “President Trump just finished his tariff speech at the White House and we would characterize this slate of tariffs as ‘worse than the worst case scenario’ the Street was fearing,” said Dan Ives, senior analyst at Wedbush Securities, in a note. Ives highlighted the “jaw dropper” of Trump imposing hefty reciprocal tariffs on China, bringing its rate to 54%.

Administration’s Response and Future Implications

Despite the market turmoil, members of the Trump administration appeared unfazed. US Treasury Secretary Scott Bessent told Bloomberg that a selloff in stocks was “a Mag 7 problem not a MAGA problem,” referring to the “Magnificent Seven” of tech stocks that include Apple, Amazon, Meta, Microsoft, Google, Tesla, and Nvidia.

Economists expect that Trump’s sweeping tariffs could upend global supply chains, stoke inflation, and drag on economic growth. JoAnne Bianco, chief investment strategist at BondBloxx, said the US will continue to experience elevated uncertainty and market volatility as investors assess the “detrimental economic impact” of Trump’s tariffs.

Long-term Outlook and Potential Silver Linings

The long-term implications of these tariffs are uncertain but potentially severe. The tariffs could lead to a global recession, with many countries likely to enter economic downturns if the tariffs remain in place for an extended period. The uncertainty created by these tariffs has already weighed down the US economy, and the full extent of their impact is yet to be seen.

Chris Zaccarelli, chief investment officer at Northlight Asset Management, noted that the initial leaks about the tariffs were positive, but the details turned out to be far worse than expected. “The silver lining for investors could be that this is only a starting point for negotiations with other countries and ultimately tariff rates will come down across the board — but for now traders are shooting first and asking questions later,” said Zaccarelli.

President Trump’s decision to impose sweeping tariffs on global imports represents a significant gamble with potentially far-reaching economic consequences. While the immediate impact is felt in higher consumer prices and market volatility, the long-term effects could include a global recession and a breakdown in international trade relations. The coming weeks and months will be crucial in determining how the international community responds and whether the US can navigate these challenges without severe economic repercussions.