President Trump announced today that the U.S. will impose an additional 50% tariff on Chinese goods starting on Tuesday if China does not roll back its recently announced 34% retaliatory tariffs on American products. This new threat comes after Trump already raised tariffs on China. Trump said on Truth Social that unless China reverses its actions by April 8, the new tariffs will take effect the next day, and all talks with Chinese officials will be canceled.
It is worth noting that Trump criticized China for what he called long-standing trade abuses, which include record-high tariffs, currency manipulation, illegal subsidies, and unfair trade practices. He also emphasized that other countries asking for negotiations with the U.S. will see their discussions move forward immediately. It is clear that Trump will maintain his tough and rigid trade stance, especially with nations that have imposed retaliatory measures.
As a result, the stock market’s early gains were wiped out as indices are currently down at the time of writing. Unsurprisingly, fears about a worsening trade war and its impact on global growth appear to be driving the market volatility. This is because while tariffs are technically paid by U.S. importers, many are worried that consumers and businesses will be negatively impacted by higher prices and disrupted supply chains.
Is SPY a Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on the SPDR S&P 500 ETF Trust (SPY) based on 408 Buys, 88 Holds, and eight Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average SPY price target of $682.73 per share implies 36.2% upside potential.
