Wednesday Briefing

Credit…The New York Times

Trump pressed ahead with a trade war

President Trump’s tariffs took effect earlier this morning, hitting nearly all U.S. allies with punishing new levies and raising import taxes on Chinese goods to more than 100 percent. Trump said 70 governments have already approached the U.S. to make deals, and that officials would begin talks with Japan and South Korea. (See our cheat sheet to the tariffs.)

China has already responded with its own levies, and the E.U. is preparing its own retaliatory tariffs on American products starting next week. These plans, and others like them, have heightened fears of an economically damaging trade war and a global recession, as losses mount in stock markets around the world.

“The global trading system is only one example of the Trump administration tearing something apart,” my colleague David E. Sanger writes in this analysis, “only to reveal it has no plan for how to replace it.”

Markets: The S&P 500 posted a big gain at the start of trading, but ended down 1.6 percent, putting the benchmark index on the verge of a bear market. The market turmoil, according to Jason Karaian, our deputy business editor, “was partly because investors underestimated Trump’s willingness to follow through on steep tariffs.” Stocks in Asia slumped earlier today.

Cars: Trump’s 25 percent tariffs on imported vehicles that took effect last week are prompting companies to stop shipping cars to the U.S., as well as to shut down factories in Canada and Mexico and to lay off American workers.