Stock futures opened sharply lower. Dow futures shed about 0.8%, S&P 500 futures dropped 0.9%, and Nasdaq 100 futures fell 1%. Earnings weakness added pressure, but Trump’s tariff shock dominated headlines.
“The average tariff rate roughly on reciprocal is going from about 2.5% to 15%,” said Vasu Menon, managing director at OCBC.
https://www.reuters.com/business/view-investors-react-trumps-new-reciprocal-tariffs-announcement-2025-08-01/
President Trump’s latest executive order increases Canadian tariffs from 25% to 35%, effective August 1. Goods routed through third countries to avoid tariffs now face a new 40% duty.
https://www.reuters.com/world/americas/trump-increases-tariff-canada-35-25-2025-07-31/
Reuters confirms that some nations, including Syria and Singapore, are subject to penalties as high as 41%, depending on transshipment activity. Most other countries will see baseline rates between 10% and 41% under the new reciprocal framework.
https://www.theguardian.com/us-news/live/2025/aug/01/donald-trump-trade-tariffs-latest-us-politics-live-news-updates
The Yale Budget Lab now puts the average effective U.S. tariff rate at 18.4%, the highest since 1933. Even the post-substitution adjusted rate remains at 17.5%.
https://budgetlab.yale.edu/research/state-us-tariffs-july-30-2025
Importers are rushing to front-load shipments before the August 7 enforcement date, temporarily skewing trade data. The surge in baseline duties is likely to increase input costs across multiple industries.
Amazon tumbled 7.2% after issuing soft operating income guidance, but trade war escalation remains the main driver of Friday’s market jitters.
America now faces a fundamentally higher-cost trade regime. Even if companies absorb the blow temporarily, the structural shock is priced in.