What Happened with Trump’s Tariffs?

In April 2025, President Trump announced new tariffs which are taxes on goods the U.S. imports from other countries. Most imported items got a 10% tax, and goods from places like China faced even higher tariffs, up to 245%.

Right after the announcement, the stock market dropped sharply. The S&P 500, which tracks major U.S. companies, lost over 10% of its value in just two days. This caused a lot of concern among businesses and investors.

Experts, like those at Penn Wharton and Yale, warned that these tariffs could hurt the economy long-term:

• The economy could shrink by 6%.

• Wages could drop by 5%, costing an average middle-class worker around $22,000 over their lifetime.

• Prices on everyday goods could rise, costing households about $2,100 more per year.

A Temporary Pause on Tariffs

After seeing the negative reaction, President Trump announced a 90-day pause on most of the new tariffs (except for the ones on China).

This gave the stock market a small boost. Investors were hopeful that the situation might improve. However, because the pause is temporary and no permanent trade agreements have been made, many people are still unsure about what will happen next. Big financial companies like Goldman Sachs and J.P. Morgan are encouraging people to stay cautious.

Which Industries Were Affected the Most?

• Manufacturing:
  Many factories in the U.S. depend on parts from China. The tariffs made it more expensive for them to get the supplies they need, causing delays and higher costs.

• Energy:
  Tariffs on Canadian energy imports could make gas prices rise by up to 50 cents a gallon, especially in the Midwest.

• Technology:
  Big tech companies were also impacted. Higher costs for parts and materials put pressure on their profits.

What’s Next for the Stock Market?

Even with the pause, the market is still unsettled.

• Right now, the S&P 500 is hovering around 5500, much lower than Wall Street had predicted for 2025.

• Some experts believe it could end the year closer to 4,500, instead of the 6500 to 7,000 points that were originally forecasted.

Still, some analysts think it’s a good time to invest carefully. They suggest focusing on companies that have strong profits, low debt, and products that people need no matter what happens in the economy.

 The Big Picture

Trump’s tariffs had a big impact on the economy, causing prices to rise and making business harder for many industries. The 90-day pause helped calm the situation a little, but the future is still unclear.

Whether the economy gets stronger or weaker will depend on how trade negotiations go in the next few months. In the meantime, many experts are encouraging caution, both for investors and everyday families.