Donald Trump’s ongoing trade war is starting to have widespread effects on businesses and the stock market. On Wednesday, U.S. stocks dropped again, especially in the tech sector, as companies warned about the financial damage from rising tariffs. Big tech companies like Nvidia reported major losses due to restrictions on exports to China, estimating a $5.5 billion impact. ASML, a major chip-making equipment supplier, also expressed concern about future uncertainty. Other U.S. chip equipment companies may lose about $1 billion each year because of these trade rules. The Nasdaq index dropped 3%, with Nvidia shares falling 7%, and AMD also announced an $800 million hit.
Airlines and the Fed Express Concern
Airlines, like United, said they’re unsure about how the year will unfold. Even though they’re keeping their profit goals, they admitted it’s hard to predict what’s coming. Federal Reserve Chair Jerome Powell mentioned that the economy is slowing down and warned that tariffs could push inflation higher.
Trump claimed that several countries want trade deals with the U.S., but little progress has been made. He planned to meet personally with Japanese officials on Wednesday. Japan, a major car exporter to the U.S., could be hit hard if tariffs continue, potentially raising car prices by thousands of dollars. Some carmakers are even considering shifting production to the U.S.
Global Trade Outlook Worsens
Consumer confidence in the U.S. has dropped since Trump began pushing tariffs more aggressively in February. While some retail sales, especially autos, remained strong in March, other areas of spending are weakening. People may soon cut back on services as they focus on buying goods before prices rise further.
The World Trade Organization (WTO) now expects global trade to shrink by 0.2% in 2025, a sharp downgrade from its earlier prediction of 2.7% growth. North America is expected to see the steepest decline. The WTO warned that ongoing political tensions and retaliatory tariffs could worsen the situation. Director General Ngozi Okonjo-Iweala called the U.S.-China trade split “deeply concerning.”
UNCTAD, the UN trade body, also lowered its global growth forecast to 2.3% for 2025, just below the 2.5% mark that signals a possible global recession.
As of April 5, the U.S. imposed a 10% baseline tariff on almost all foreign imports, though some countries and products are exempt. China has responded with much higher tariffs, up to 145% on many goods.
Despite the gloom, the WTO expects modest trade growth in Asia and Europe. For the first time, it also forecasted trade in services like tourism and finance predicting a 4% increase in 2025, slightly less than expected.
