After the stock market closed on April 2, 2025, President Donald Trump announced 10% across-the-board tariffs on all imports and higher rates for specific countries with which the U.S. has large trade deficits. ETFs that track healthcare providers, food companies and gold miners held up the best on April 3, a day when the S&P 500 Index and Nasdaq Composite Index were down 4.8% and 6%, respectively. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) fell by 10.7%, despite energy imports being exempted, likely due to concerns around global growth and possible energy-related retaliation by other countries. Banking, semiconductor and retail ETFs were also among the worst-performing sector ETFs on April 3. The SPDR S&P Retail ETF (XRT) declined by 8%, driven by import-dependent companies like Dollar Tree Inc. and Five Below Inc., which were down 13% and 28%, respectively.
Best and Worst Performing Country ETFs on April 3, 2025
The proposed reciprocal tariffs varied by country, with countries that have the largest trade surplus with the U.S. facing the highest rates. Figure 2 shows the three best and worst-performing country ETFs listed in the U.S., with returns denominated in dollars. The iShares MSCI Brazil ETF (EWZ) was up 0.73% on April 3, 2025, driven by expectations of increased trade with China and lower U.S. tariffs since the country runs a trade deficit with the U.S. The VanEck Vietnam ETF (VNM) was down 10.2% on April 3 since the country faces one of the highest tariff rates of 46% due to its large trade surplus with the U.S.
Performance of Other Key Asset Classes on April 3, 2025
Not surprisingly, defensive strategies like Treasury bonds and low-volatility equities outperformed relative to the S&P 500 Index. The Invesco CurrencyShares Euro Trust (FXE), which tracks the euro relative to the U.S. dollar, also appreciated. ETFs tracking risk-on sectors like mega-cap growth, U.S. small-caps and listed private equity were down 5.9%, 6.4%, and 6.4%, respectively.
Looking Ahead
The relative performance of ETFs on April 3, 2025, is indicative of which sectors and strategies will be most impacted if the proposed tariffs are kept in place. However, as seen in recent negotiations with Canada and Mexico, trade policy in the Trump 2.0 regime has been volatile and unpredictable. CFRA’s Washington Analysis team expects litigation on this issue and expects the probability that the courts will block these actions to be less than 35%. CFRA’s policy team also projects that bilateral negotiations between the U.S. and other countries to lower tariff rates are likely, although if those fail, the U.S. tech sector is most likely to be the hardest hit through retaliatory action.
Aniket Ullal is SVP, ETF Data and Analytics for CFRA, one of the world’s largest providers of independent investment research. Aniket founded First Bridge Data, a leading source for global ETF data and analytics that was acquired by CFRA in August 2019.
