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wild that we wouldn't be here if folks had taken the talking points seriously, but because they could be brushed aside as bombast, they came to pass.
It's the constant playbook of the trump explainer/apologists:
* He's just being bombastic
* It's just a negotiation tool
* Sure he's doing it but it's going to be a narrow policy
* Fine its broad but it's just temporary
* Yeah its broad and permanent but it won't be too harmful
* Actually it's a great idea and he's smart for doing it
No, half of America’s voters blew it. The market is just expressing the consequences.
The odd part is that Congress, at any time, can revoke these tariffs but are choosing not to do so because they need them for the tax cuts the GOP will legislate later this year.
The only sad thing during this whole ordeal is how ineffectual democratic politicians are... especially when they personally dealt with minority parties stopping them quite easily for the last 15 years. You'd think they'd learn some lessons but their failure to seize the moment is the only consistency they have.
Voters too, but the fact that the business community gave no serious pushback given what was at stake and anyone with Econ 101 exposure could clearly foresee grave consequences... This is their wheelhouse for crying out loud. Voters aren't always sophisticated but Wall Street should know better.
Actually, about 31% of the voters blew it. There were ~245M eligible voters and ~77M cast the deciding vote.
My faith in American "democracy" has faded significantly.
edit: fix the vote count.
The markets, while often right after a while, can be a bit slow. I remember the weeks in February/March 2020. The writing about the upcoming global pandemic was on the wall, yet I had enough time to calmly sell all my stocks during the week before everything came crashing down.
Same slowness with the reaction to Deepseek recently.
Two things.
1. The tariffs have not yet been felt. This is all projection. Once people feel the tariffs things are going to get much worse.
2. China has already retaliated. EU will announce retaliatory tariffs next week. Trump is likely to take it as a challenge and double down.
Agreed and its not just "prices will be higher".
You can pretty reasonably expect goods shortages as the entire global economy tries to re-adjust supply chains to more tariff friendly domiciles.
Of course everyone will be doing so at the same time, competing for the same finite factor capacity.
For example - If your Nike right now for example, you might be winding down Vietnam production volume and trying to spin up more volume in existing country footprints, while also trying to find new factories there as well. And then those suppliers will be looking for new suppliers for shoestrings and metal eyelets and 100 other things. And those suppliers will be searching for new suppliers of cotton, polyester, steel, cardboard, etc.
There is zero chance this happens without cost AND disruption! So things can get worse before they get worse!
I keep asking this of people making the argument of “when tariffs are felt…”?
Where do you think they will be felt and by who?
My guess is among Trump supporters, especially among those solid blue collar middle class vocal MAGA ones, most of these tariffs will not be felt in any really meaningful way. The tariffs that might affect the middle class (basically east Asia) will be the first ones that end up negotiating them away before American consumers feel them…because it’s in those countries best interest and they know it.
The biggest danger to Trump from these tariffs are from the GOP politicians and conservative retirees and nearing retirement age who will not be happy with the stock market if it doesn’t stabilize soon. The price increases don’t hurt them, it’s the impact on their portfolios.
Solid blue collar people will pay most of it in form of more expensive cloth, food, cars ... everything. The poorer you are, the more you will feel it. If you are rich, prices going up by 20% are nothing. If you are middle class, it is annoying. If you are poor, it is disaster.
Plus, truly rich are getting lower taxes. Tariffs are partially meant to offset those looses.
This is, bar none, the stupidest self-own on a national level I've ever seen, and that includes Brexit. These idiotic moves just erased a few trillion dollars of national wealth without getting anything in return.
For the rest of my life, if anyone ever again unironically says we need a businessman for president, I will laugh in their face.
In fairness, not all businessmen have multiple bankruptcies, two impeachements, and 34 felony convictions.
Being able to run an enterprise well (and there's plenty of evidence to the contrary) is no guarantee of being able to direct an entire economy.
A proper businessman might be good. But a sleazy "You want to buy a watch?" kind of "businessman" like the one we have now?
Well, maybe trusting a businessman known for being able to bankrupt a casino is not advisable.
Ever since the election, there's been a lot of talk about markets as good prediction engines, why did everyone seem to miss this one?
Markets make rational calculations. I'm not sure how you could have rationally predicted this. For all I know he'll scrap it all on Monday. It's a bit random.
Hasn't there been too many "Surely they can't be that stupid/incompetent?", starting with "Hillary is surely going to win it"... and until yesterday everyone thought "Surely the regime in charge of the world's biggest economy isn't going to agree to the geriartic-in-a-full-diaper[1] wanting to implement his first-grader logic of how the world economy should work?".
[1] "I’ve heard from a reliable source, that Trump smells of soiled diapers, Axe Body Spray and hotdog burps.": https://www.indy100.com/politics/trump/trump-smell-kinzinger...
Because he is backed by a bunch of billionaires and everyone is trying to figure out why they are shooting themselves in the foot.
Note that the Shiller ratio is still at 31.3.
Stocks are still historically expensive, and have much room to decline further.
Seeking peace of mind? Proceed to Bogleheads.org and read.
Trump is doing exactly the craziest versions of the stuff he promised to do, without guardrails and 'adults in the room' of his first admin.
Maybe its for the best so people are finally rid of this madness.
After months of talking about replacing income tax with tariffs, and his revered External Revenue Service replacing the IRS with trillions in tariff income per year, and just this morning saying that he'll never change his mind on this so manufacturers need to rush back (I guess Americans yearn for the $4 a day jobs making t-shirts or something), rapidly Trump and his sycophants are, in the face of market obliteration and literally everyone with a brain saying how dumb this all is, claiming it's a grand negotiating strategy. By mid-day various Trump supplicants like his sprog and Ackman were pretending there was a mad rush to negotiate the best terms first.
Vietnam, for instance, supposedly is on the phone "negotiating". But what is Vietnam going to negotiate? It has negligible trade barriers or tariffs -- we all realize the reciprocal thing is a ridiculous lie -- and an income per capita of like $2,500. Vietnam cannot fix the fact that they're cheap labour that quite literally benefits the US lifestyle.
In other words, after this profoundly stupid, catastrophically economically ignorant debacle, they're trying to back out yet again.
It is simply staggering how much of an idiocracy the US has become. In any normal government this clown would have people stopping him from this insanity. Instead he has slobbering bootlickers like Howard Lutnick trying to rationalize every bit of insanity.
And things will not return back to normal. Hundreds of billions of dollars of damage have already been done to the US, and this time they aren't going to fixed by another backtrack.
Wall Street or at least hedge funds love this kind of volatility
I hope people start taking Trump seriously now when he's talking about impeaching judges, critical media being illegal, running for a third term and taking over sovereign nations.
Knowing nearly nothing about the stock market, I say some time has to pass before we truly know whether these current (and probably temporary) consequences will persist.
I mean, people sign the death sentences of companies that have gradual decline of their stock prices over the course of some mere two months... and then it rebounds, and then you check the one-year graphs and are wondering why were you worried.
So I don't know. Is it really so bad? Honest question. I am a layman.
I agree with your point to a certain degree. I think we should be willing to try bad/risky ideas occasionally if just to remind ourselves why they are bad. However:
1. It can take years to make something and seconds to break it. These changes are so drastic and damaging that we may permanently set our economy back decades, especially when if other countries no longer trust us.
2. It puts a lot of faith in politicians to admit mistakes. The disastrous trade policies of the 1930s were never gotten rid of until after they led to WWII.
The current one-year graph is now in negative territory. And economists are saying there's a good chance we're headed for a global recession. The stagflation of the 70s is a real possibility, although employment news for March was good.
Right now countries around the world are re-organizing their trading patterns in ways that will have permanent effects. Even if Trump cancels the tariffs tomorrow, he would have to convince the rest of the world that he'll never do anything like this again -- and that actually he (and the US) are reliable trading partners. I just can't see how he'd do it if he wanted to, and I don't think he wants to.
This is what Trump & Elon wanted all along. They even said it outright duh.
That's what gets me. Trump has been telling us he was going to tank the stock market and increase unemployment -- it was practically his entire platform. Why are so many people acting surprised?
Trump recently "reTruthed" a video that claimed he is intentionally tanking the stock market to drive down interest rates. Today he called on Jerome Powell to lower interest rates despite the fact that there is a massive looming inflation risk.
Who in their right mind would care this much? Real estate investors: https://x.com/GrantCardone/status/1907993458687549892
People were worried about Trump launching a coupe on the government. In the meantime, this is a coupe over the US economy - this is a blatant attempt to hand economic power from business investors to land investors. From industry to land wealth.
Trump is a capitalist trojan horse. He says it himself that he does not believe in competition. That the best/first brand should win and the others should lose. The most famous person should get the job over some nerd. He inherently does not believe in markets as a source of wealth.
Crash the market and let the oligarchs buy up distressed assets...
I'm sorry, but how did Wall St "blow it"? Is the piece making the case that if this sell-off had started in January, then Trump wouldn't have magicked up these tariffs?
I took it to mean if WS had stridently objected and lobbied against it. I didn't hear any unified opposition.
No, boomers and NGO's who raided the coffers blew it and left us with $36 trillion in debt, along with $1.2 trillion on _just the interest payments_ - which is more than the US spends on Defense.
Now we can't build anything, and the other side is still holding out hope that eventually we'll be able to fix by just taxing more - despite the fact that Congress won't even vote to prevent themselves from insider trading...which means the middle class will continue to bear the downward pressure.
Which NGOs?
> Now we can't build anything
Yeah, this isn't due to the debt. Most infrastructure projects in the US are disasters (usually due to layers of outsourcing, tons of consultants, corruption, lack of competence) that cost multiple times their equivalents elsewhere in developed countries.
It's exactly like in healthcare - the US spends more to get less than similarly developed countries. The amounts available to spend aren't the issue here, the terrible use is.
There's definitely a lot of that.
As far as I understand, however, there's not much of a path between the current tariff measures and reducing the US debt. Especially not with the tax cuts or if war with China is still in the books.
You do realize this "debt" is denominated in the currency that the US itself controls, and can create and destroy at will, right? You cannot analyze this with the logic of household finances. The debt owed to bond holders is our and other countries continuing to buy into the American system. And the "debt" owed to other government agencies (including the Fed) is nothing more than a political martingale, to support the Republicans' kayfabe "fiscal responsibility" of the past forty years, where they sabotaged investments in our society so they could give away the wealth to banksters instead.
The debt goes up during republican governments much more then during democrat ones. If you cared about debt, you would voted democrats.
> No, boomers and NGO's who raided the coffers blew it and left us with $36 trillion in debt
Serious question - when did you start paying attention to NGOs?
One of the great oddities of this whole episode is watching people that have complained about unfettered free markets for years or decades suddenly become latter day Milton Friedman absolutists. Being of the libertarian side of things it has been deeply strange watching profoundly protectionist countries suddenly preaching the importance of the free trade they have been busy obstructing.
While the world swings from one authoritarian brand to another it does feel like a lonely place here for those of us that just want less intervention in everything.
There is nothing wrong with protectionist measures per se. These tariffs are just not set in reality. They demand the impossible, based on false premises. This won't happen. Therefore an economic recession will unfold.
It's a multitude of things.
- High interest rates trying to combat inflation.
- AI, tech's latest, greatest thing is looking like a flop, at least from hype perspective.
- Tariffs.
1 and 2 have been constant for months now. In fact, rates have already started going down after inflation did.
So no, it's mostly the tariffs.
This is delusional. The stock tanked literally the moment the board came out. Futures went -5% across the board. The actual minute China announced retaliation: boom.