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Trump Officials Warn of Tariff Pain as Price Increases Loom and Stocks Tumble

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In the weeks leading up to his expansive global tariffs, President Trump and his top aides tried to prime the public for economic pain. They warned that while there would be fallout from their aggressive trade strategy, it would prove short-lived and benefit the economy in the long run.Investors, businesses and others made clear on Thursday that the U.S. economy was not ready to accept that approach. Global markets tumbled, economists warned of a possible recession and consumers braced for price increases on cars, food, clothing and more.The early tumult underscored the high stakes of Mr. Trump’s agenda, which the president has framed as a painful medical procedure to rescue an economy he likened to a “sick patient.” In the eyes of Mr. Trump, the United States is going to “boom” once his tariffs have had time to reset the nation’s trade relationships, raise revenue and boost domestic production.But those tariffs are expected to send prices skyrocketing in the interim, an unwelcome development for Americans already struggling with years of elevated prices. Several economists have increased the odds of a recession in their forecasts as they projected a slowdown in consumer spending, business investment and economic growth.A new analysis from the Yale Budget Lab found that Mr. Trump’s overall tariffs could cause price levels to rise 2.3 percent in the short term. That would translate into an average loss of $3,800 in purchasing power per household based on 2024 dollars.“Prices are going to go up, period,” said Martha Gimbel, executive director of the Yale Budget Lab, adding that companies were going to feel the immediate pinch. “These are really big tariffs. These are not things we can expect companies to just absorb.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Why Did Trump Impose Tariffs, and What’s Next? Everything to Know.

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    President Trump announced what could be one of the most drastic economic policy changes in decades on Wednesday, when he substituted America’s longstanding system of taxing imports with a new tariff system of his own devising.The president said the tariffs would reverse decades of what he called unfair treatment by the rest of the world and result in factories and jobs moving back to the United States.“The markets are going to boom” and “the country is going to boom,” Mr. Trump said on Thursday, as global financial markets suffered their biggest rout in years. He added that other countries “have taken advantage of us for many, many years.”Economists’ estimates have been far more grim, with most predicting that the president’s sweeping tariffs and likely retaliation will slow U.S. economic growth, push up costs for consumers and make life difficult for businesses that depend on international supply chains.The president’s measure is both consequential and complicated. Here’s what you need to know.What did the president just do?Mr. Trump announced two big tariff plans that apply to most of the world. One component is a “base line” tariff of 10 percent that will apply broadly to nearly all U.S. imports, except for products coming from Canada and Mexico.The second measure is what the president is calling a “reciprocal” tariff. That levy will apply to 57 countries that Mr. Trump says have high tariffs and other unfair economic practices that have hurt American exporters. He said this is a reciprocal tariff because it will match the way other countries treat the United States.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    After Trump Tariffs, Volkswagen to Add ‘Import Fees’ to Cars Sold in U.S.

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    Volkswagen, the German automaker, has told its car dealers that it plans to add an import fee later this month to the price of imported cars sold in the United States.The company’s move is one of the first and clearest examples of automakers using price increases to deal with the 25 percent tariffs President Trump imposed on car and auto parts imports. The tariffs on vehicles went into effect on Thursday and the levies on parts will become effective on May 3.In an April 1 memo to dealers, Volkswagen said that the exact fees would be determined by the middle of April. The New York Times reviewed a copy of the memo. The automaker also told dealers it planned to cut back on sales incentives and had halted rail shipments of cars to the United States from its plants in Mexico, although shipments by sea continue.Volkswagen plans to hold cars that are subject to the tariffs in port for “the near term.” It also told dealers that the price of the Volkswagen Atlas sport utility vehicle, which is made in Chattanooga, Tenn., could be affected by the tariffs because it includes important imported components. The extent of the impact most likely will not be known until May, the memo said.The automaker, including its Audi and Porsche brands, imports almost all the cars it sells in the United States. Besides the Atlas, Volkswagen also assembles the ID.4 electric sport-utility vehicle in Tennessee.In a statement, Volkswagen confirmed it had sent the memo to dealers because it wanted to be “very transparent about navigating through this time of uncertainty.”“We have our dealers’ and customers’ best interest at heart, and once we have quantified the impact on the business we will share our strategy with our dealers,” the company said.Other automakers are also making adjustments to respond to the tariffs. Stellantis, which owns Jeep, Ram, Dodge and Chrysler, said on Thursday that it is temporarily halting production at a plant in Mexico and another in Canada in response to the auto tariffs.The company said that a factory in Windsor, Ontario, that makes the Chrysler Pacifica minivan and the Dodge Charger muscle car will shut down for two weeks. And a plant in Toluca, Mexico, that makes the Jeep Compass and Wagoneer S will be idled starting on April 7 for the rest of the month.Stellantis said that the production stoppages in Canada and Mexico would force it to lay off about 900 workers in Indiana and Michigan. More

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    Apple Leads Tech Stock Sell-Off After Trump Tariffs, Falling 9 Percent

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    On Thursday morning, Tim Cook, Apple’s chief executive, woke up to the worst day for his company’s stock in five years.Apple shares fell more than 9 percent in response to President Trump’s plan to put steep tariffs on products made abroad. The declines at the world’s most valuable company led a sharp sell-off in tech stocks as the Nasdaq composite index, which is loaded with technology companies, sank nearly 6 percent.Collectively, the largest tech companies, which have been at the forefront of the U.S. economy over the past decade, lost nearly $1 trillion in the day of trading. The declines at Apple, Nvidia, Microsoft, Meta, Alphabet and Amazon resulted in one of the industry’s worst-performing days since the Covid-19 pandemic turned the global economy upside down.Instead of “liberation day,” as Mr. Trump branded his tariff news conference, some market observers began calling it “obliteration day.” Richard Kramer, an analyst at Arete Research, said, “Today is an across-the-board disruption of the American economy, so anything with consumer exposure is getting creamed.”Apple was at the forefront of the tech industry’s drop because it makes almost all of its iPhones, iPads and Macs overseas. The company counts on the sale of those devices for three-quarters of its nearly $400 billion in annual revenue. It will either have to cover the costs of tariffs, cutting into its profits, or pass them on to customers by raising prices, which could reduce the number of devices it sells.The potential hit to the company’s profits triggered one of its steepest declines in its share price during trading since March 2020, when Apple fell 10 percent as fears of the coronavirus triggered a market sell-off. We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Ford Offers Discounts on Cars and Trucks as Auto Tariffs Kick In

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    Ford Motor said on Thursday that it was lowering prices on most of its vehicles to the same levels it charges employees in a bid to boost sales as President Trump’s tariffs on imported cars took effect.The tariffs began on Thursday on vehicles imported from Mexico, Canada, Japan, Germany and other countries. The duties — 25 percent of the value of the vehicle in most cases — are expected to increase prices of new cars and trucks and dampen demand.About half the vehicles sold in the United States each year are produced in other countries. Mexico is the top source of those cars and Canada is among the largest. For three decades, the United States, Canada and Mexico have had a free-trade zone, and automakers have moved parts and vehicles freely among the three countries.Ford’s new program, which the company is calling “From America, for America,” could help reduce a large inventory of unsold cars. In February, Ford had more cars in inventory as measured by how many days it would take to sell them all than all but three other brands — Jaguar, Mini and Dodge — according to Cox Automotive, a research firm.Ford’s new discounts apply to all new 2024 and 2025 vehicles, except for specialty versions of the Bronco sport-utility vehicle; the Mustang sports car; Super Duty versions of F-Series pickups; and a few other models.“Consumers will pay what we pay,” Rob Kaffl, Ford’s director of U.S. sales and dealer relations, said in a statement.The automaker also said it was extending another incentive program in which buyers of new electric models get a home charger for free, along with the cost of installation. That offer is now valid until June 30.Ford had more than 568,000 vehicles in inventory at the end of March, up about 8 percent from a year ago. More

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    Trump Says His Tariffs Will Address Unfair Global Trade. Is He Right?

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    President Trump has accused America’s trading partners of undermining the United States for decades, saying they have engaged in unfair trade practices to steal the country’s wealth and enrich their own economies.He has set his sights on not only adversaries like China, but also traditional allies like Canada and Europe. And he has complained about a number of factors, including high tariffs that other countries charge American products, and persistent trade deficits the United States has with foreign countries. Mr. Trump has promised to correct this situation on Wednesday, when he announces expansive tariffs on foreign products that he says will level the playing field.In some cases, there’s truth to the president’s claim that the United States offers its trading partners more favorable terms than it often gets in return. As a proponent of free markets, the United States has long been more open to trade than many countries globally.That has encouraged the United States to rely on imports of many critical goods, like semiconductors and pharmaceuticals, instead of manufacturing them itself. And some countries do have tough trade barriers to U.S. exports, or economic policies that distort global markets — particularly China, which has flooded the world with manufactured goods.Still, trade experts say that Mr. Trump’s claims include a heavy dose of exaggeration, as well as hypocrisy.For example, Mr. Trump has singled out high tariff rates that countries charge on certain U.S. exports including Europe’s tax on cars and India’s levy on motorcycles. But the United States also has high tariff rates that it charges on certain imports, such as a 25 percent fee on light trucks. And Mr. Trump has lumped in friendly allies like Canada, which have some limits to U.S. exports outside a few sectors, with nations like China, which have extensive trade barriers.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump Is Set to Unveil Expansive Global Tariffs

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    President Trump is set to unveil his most expansive tariffs to date on Wednesday afternoon, when he will detail potentially punishing levies on countries around the globe, including America’s largest trading partners.Mr. Trump has promised for months to impose what he calls “reciprocal” tariffs, which the president says will correct years of “unfair” trade in which other countries have been “ripping off” America.“We helped everybody, and they don’t help us,” Mr. Trump said on Monday.Exactly how he plans to structure the new tariffs is not yet clear. The White House press secretary said Tuesday afternoon that Mr. Trump had decided on a course of action and that the new tariffs would go into effect immediately, but that he and his trade advisers were continuing to hash out details.The president has talked about basing a new tariff rate for countries on the tariffs they place on American products, as well as other trading practices that the Trump team deems unfair.Mr. Trump has also considered a flat 20 percent tariff on all trading partners. Such a levy would be aimed more at generating revenue to offset the tax cuts that he hopes to push through Congress.Either approach would be a significant escalation toward a trade war that Mr. Trump seems eager to unleash. Governments across the world have been preparing to hit back if the president raises tariffs, raising the potential for a destabilizing economic battle that drives up costs as Mr. Trump tries to force supply chains back to the United States.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    As Trump Stokes Uncertainty, the Fed Asks Businesses Where It Hurts

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    The central bank’s outreach to companies has taken on new significance as the outlook for growth and inflation gets cloudier.Chris Bergen, who runs a commercial greenhouse business in northern Minnesota, finds himself “walking a tightrope” roughly two months into President Trump’s second term. Acute uncertainty about how the administration’s trade and immigration policies will unfold and affect the economy has made him much more cautious about any expansion plans.As one of the country’s biggest producers of bedding plants, perennials and other flowers, Bergen’s Greenhouses is exposed on many fronts.Every June, it trucks in more than six million pounds of peat moss from Manitoba. Suppliers have stopped quoting prices until they have more clarity on tariffs. The plastic flower pots that Mr. Bergen imports from China could also wind up costing more if tariffs remain in place, squeezing already “razor-thin margins,” he said. He is also worried about needing to find workers if Mr. Trump, as part of an immigration crackdown, ends a program that provides temporary visas to many of the company’s agricultural workers.“We’re not putting our foot on the brake, but we are taking our foot off the gas,” said Mr. Bergen, whose family has run the business for over a century.That caution is one of the biggest concerns for the Federal Reserve, which is facing an increasingly challenging economic moment with little precedent. The central bank is trying to get a better read on the economy as it debates when — or if — it can again lower interest rates with inflation still too high for its liking. Businesses are warning of both higher prices and slower growth, effects that have yet to show up entirely in the economic data. The 12 regional presidents at the central bank have always kept close tabs on businesses in their districts in order to understand how economic conditions are evolving. That local outreach has taken on new significance as the range of possible outcomes has widened drastically.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More