President Donald Trump signed Executive Order 14257 on April 2, a move that he called “Liberation Day.” Why? Because that executive order, along with Trump using the International Emergency Economic Powers Act (IEEPA), implemented a series of tariffs upon nearly all of America’s trading partners, an act Trump defended as liberating the United States from what he called unfair trade deals of the past.
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The signing of that executive order has created a summer of economic uncertainty both for America as well as its many trade partners. Trump instituted a baseline 10% on those trade partners, followed by a series of additional tariffs for some countries, while decreasing tariffs for others, or even pausing tariffs for certain countries to allow for further negotiation.
In America, the looming threat of tariffs has created a fair amount of buyer concern — tariffs mean higher consumer prices here at home, and both shoppers and businesses alike have spent the summer waiting for the near-inevitable price-hikes.
So it comes as no surprise that Trump’s somewhat shocking Liberation Day announcement immediately caused global markets to crash in response to such a bold move. The markets eventually absorbed the news and righted themselves. That said, has the continued yo-yoing of tariff threats slowed the stock market?
The answer is yes.
First, there was the initial market crashes in response to the news. Trump’s announced tariffs were far more extreme than what experts and analysts predicted, and the April announcement was seen was a “worse than the worst case scenario” by economists — the Dow Jones fell 3.98%, the Nasdaq Composite dropped 5.97% and the broad market index collapsed by 4.84%, the worst showing for each since the summer of 2020 when COVID ravaged the country and its economy.
That isn’t the only time Trump’s tariffs have torpedoed the stock market, though. With almost every newly-announced increase in tariffs against a certain country, the markets tend to dive in response.
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For example, August 2025 began with markets across the planet dropping in response to Trump’s newest tariffs against America’s partners, with S&P falling 1.6%, the Dow dropping by 1.23% and the Nasdaq Composite slipping by 2.24%, per CNN. This was Nasdaq’s biggest single-day dip since April, and the S&P 500’s biggest fall since May. All markets had been on a two-week rise prior to this most recent announcement.