Wall Street falls again: Trump's tariff policies once again provoke deep reflection

On Tuesday, as the trade war between the United States and its major trading partners escalated, the stock market further fell on Wall Street, wiping out all market gains since Trump's election in November.

Starting from Tuesday, the Trump administration will impose a 25% tariff on products imported from Canada and Mexico, and a 10% import tariff on Canadian energy products. The 10% tariff imposed by Trump on Chinese imports in February doubled to 20%. These three countries have all announced retaliatory actions, raising concerns about a global economic slowdown.

The recent rebound in the US stock market is mainly based on hopes of strengthening policies for the US economy and businesses. Concerns about tariffs raising consumer prices and reigniting inflation have been putting pressure on the economy and Wall Street. Most of the local goods in the United States rely on imports, and Trump's retaliatory tariff policy will ultimately lead to a rapid increase in commodity costs, which will ignite the finally eased inflation again.

These tariffs have prompted retailers including Target and Best Buy to issue warnings when reporting their latest financial performance. Target's stock price fell by 3% and stated that its profit at the beginning of the year will face "significant pressure" due to tariffs and other costs. Best Buy's stock price plummeted 13.3% after the company provided investors with lower than expected profit forecasts and warned of the impact of tariffs.

Best Buy CEO Corey Barry said, "International trade is crucial for our business and industry. Barry stated that China and Mexico are the two major sources of Best Buy's product sales, and it expects suppliers to pass on tariff costs, which could lead to price increases for American consumers.

In response to the new tariffs imposed by the United States, China announced that it will impose additional tariffs of up to 15% on major agricultural products imported from the United States, including chicken, pork, soybeans, and beef. Canada plans to impose tariffs on over $100 billion worth of US goods within 21 days. Mexico also plans to impose tariffs on goods imported from the United States. This also leads to higher prices for American goods abroad compared to similar products, making them even less competitive.

Previously, the Federal Reserve raised interest rates to the highest level in 20 years to curb inflation. As the inflation rate approaches its target of 2% in 2024, it has begun to lower its benchmark interest rate. But tariffs threaten price increases, which could exacerbate inflation. Wall Street has been hoping that the Federal Reserve will continue to lower interest rates in 2025. But due to the uncertainty of the economic impact of tariffs. It is expected that the Federal Reserve will maintain interest rate stability at its meeting later in March.

In the bond market, treasury bond bond yields are mixed. The yield on the 10-year US treasury bond bond rose to 4.20% from 4.16% late Monday. Sam Stovall, chief investment strategist of CFRA, said: "Because tariffs are effective, and there is no guarantee that they may be temporary, this is infiltrating into the bond market. We see that the threat of rising inflation is eroding the value of 10-year treasury bond bonds.".

After a series of worrying economic reports, people expressed concerns about profits, including American households becoming more pessimistic about inflation and cutting spending. The continuous reduction in consumer spending has also slowed down the growth of the US economy to some extent.