Today was the second day in a row the stock market plummeted in response to President Donald Trump’s announced tariffs. Markets around the world are similarly roiled.
Trump’s latest round of tariffs are of a scale never seen before. There is no real formula or strategy behind the numbers imposed leaving economists and financial analysts puzzled. Jim Cramer of CNBC said, “I am a fair trader, not a free trader, but this is bush league stuff.”
Countries around the world announced reciprocal tariffs on US goods. China imposed a 34% tariff on all US goods. The tariffs which includes steep costs on our allies have sparked inflation fears and worry about a world wide recession.
The Dow dropped by 2200 points today on top of yesterday’s losses, resulting in a 10% pullback in just two days. This is the worst performance since the start of the Covid-19 pandemic.
Voters elected Trump largely on his economic message. Inflation was caused under Biden’s term as a result of emerging from the pandemic. Economies around the world saw inflation. The US recovered the fastest, but that opened the door for Trump’s messaging. He promised to improve the economy. Now there is tremendous uncertainty and imminent higher prices.
Trump has also disheveled relationships with our allies. We will see a realignment throughout the world and the United States is no longer viewed as a reliable partner or stable democracy.