Trump Trade War Live: US Jobs Market Weakening as Global Markets Plunge
On August 1, 2025, U.S. President Donald Trump dramatically escalated the global trade war with a sweeping executive order imposing new tariffs ranging from 10% to 41% on imports from dozens of major trading partners Business Insider+6The Guardian+6Reuters+6. Among the nations targeted, Canada (35%), Switzerland (up to 39%), Taiwan (20%), India (25%), and South Africa were hit hardest—while some countries like the EU, UK, and Japan secured lower flat rates or exemptions through late-stage deals The Guardian+2Financial Times+2.
The tariff announcement came just ahead of the Bureau of Labor Statistics’ July jobs report, which delivered a jarring blow: the U.S. economy added only 73,000 non‑farm payroll jobs, far below economists’ expectations of around 110,000 The Times+4Reuters+4Business Insider+4. More alarmingly, May and June job data were revised downward by a combined 258,000 jobs, revealing a deeper-than-expected slowdown Reuters+12thewellnews.com+12investors.com+12. The jobless rate ticked up slightly to 4.2%, as labour force participation waned and unemployment rose en.wikipedia.org+10Reuters+10AP News+10.
The combined shocks had immediate repercussions in global financial markets. U.S. stock futures dropped sharply—S&P 500 and Nasdaq futures fell by about 1%, while the Dow futures lost over 1.1% Reuters+1. Major indices such as the Dow, S&P 500, and Nasdaq opened lower, with declines of around 1.1 to 1.5%, and Amazon shares plunged ~7–8% pre‑market amid concerns over its cloud business and exposure to tariffs ReutersThe Guardian.
International markets mirrored the U.S. slide. Europe’s STOXX 600 dropped about 1.3–1.4%, marking its steepest weekly decline since April when prior tariffs sparked global turmoil Reuters+1. Asia‑Pacific equity indices also suffered—MSCI ex‑Japan fell roughly 1.5%, while the Nikkei, Hang Seng, and CSI 300 slipped between 0.5% and 1% ReutersReuters.
From a macroeconomic perspective, the weak labour market strengthens the case for the Federal Reserve to consider cutting interest rates. Before the data release, markets had priced in around a 45% chance of a September rate cut—but that probability surged to more than 90% after the report ReutersBusiness Insider. Treasury yields responded with sharp declines: the 2‑year fell about 17.5 basis points, and the 10‑year dropped roughly 9 bps ReutersBusiness Insider.
Analysts warn the new tariffs could raise manufacturing costs by up to 4.5%, squeeze profit margins, suppress wages and investment, and even threaten jobs—especially within manufacturing, administrative support, and government sectors, where recent job losses were concentrated investors.com+1.
In sum, President Trump’s latest tariff salvo, coupled with a disappointing U.S. jobs report, has unsettled markets and heightened fears of economic fragility. With investor sentiment souring and recession indicators rising, this latest round poses serious risks to job creation, business confidence, and financial stability.
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