Schwab Chief Investment Strategist Liz Ann Sonders provided insights on investor strategies following market disruptions due to President Donald Trump’s recent tariff announcement, as discussed on ‘Barron’s Roundtable.’
On Saturday, a 10% tariff imposed by Trump on imports from numerous countries became effective, with U.S. customs officials beginning collections. The initial “baseline” tariff was implemented at various entry points, including seaports, airports, and customs warehouses, starting at 12:01 a.m. ET. In the following week, increased tariffs on goods from 57 major trading partners are anticipated.
Trump’s midweek tariff announcement significantly impacted global stock markets, resulting in a $5 trillion drop in the stock market value for S&P 500 companies by the close of trading on Friday, marking a historic two-day decrease. The prices of oil and commodities also plummeted.
Australia, the United Kingdom, Colombia, Argentina, Egypt, and Saudi Arabia are among the countries first affected by the 10% tariff. According to a U.S. Customs and Border Protection bulletin issued to shippers, there is no grace period for shipments already underway as of midnight Saturday.
However, a 51-day grace period is being granted by U.S. Customs and Border Protection for goods already in transit to the U.S. before 12:01 a.m. ET on Saturday, providing they arrive by 12:01 a.m. ET on May 27 to avoid the 10% tax.
Higher “reciprocal” tariff rates, ranging from 11% to 50%, are scheduled to be implemented on Wednesday. This includes a 20% tariff on European Union imports and a 34% tariff on Chinese goods, bringing the total tariffs on Chinese imports to 54%.
Vietnam will face a 46% tariff and recently agreed to enter negotiations with Trump. The country previously benefited from a U.S. supply chain shift away from China during Trump’s initial trade conflict with Beijing.
Canada and Mexico remain exempt from the newest tariffs due to their existing 25% tariff status for non-compliance with U.S.-Mexico-Canada agreement rules of origin.
Goods affected by separate 25% national security tariffs, such as steel, aluminum, automobiles, trucks, and auto parts, are unaffected by the new tariff policies.
Additionally, the administration has published a list of over 1,000 product categories exempt from the tariffs, including crude oil, various energy imports, pharmaceuticals, uranium, titanium, lumber, semiconductors, and copper, which collectively amounted to $645 billion in imports in 2024. The administration is also investigating several sectors, aside from energy, for potential national security tariffs.
Reuters has contributed to this report.
