Yesterday morning everyone was talking about Wednesday evening’s tariff announcement. This morning we look at Thursday’s reaction to that announcement.
Markets reacted. The U.S. stock market yesterday had the biggest drop since the last time Trump was president. The Bloomberg Dollar Spot Index showed the dollar lost the most value within a single day since Bloomberg started measuring it in 2005.
Corporations reacted. Automaker Stellantic laid off 900 U.S. workers in response to the tariffs while other corporate leaders warned of price hikes and delayed investments.
Analysts reacted. MIT economist, and former Chief Economist of the International Monetary Fund, Olivier Blanchard used the words “simply stupid”. UC economist – also former chief economist of the IMF — Maurice Obstfeld said the tariffs “will raise US prices, damage the US economy, and damage economies abroad, while doing little to improve the US foreign trade balance—unless they dramatically slow US growth…The president effectively declared war on the world economy today. Retaliation can be expected, reinforcing the carnage.”
And, yes, nations reacted. Australia’s prime minister said the tariff decision “has no basis in logic and [is] not the act of a friend.” Canada’s prime minister announced Canada would match U.S. auto tariffs. And this morning, China has announced retaliatory tariffs of 34% sending Dow futures down this morning over 1400 points on top of yesterday’s losses.
The president’s reaction? He left Washington apparently to go play golf for the 20th day in his brief time in office, posting in all caps “THE OPERATION IS OVER! THE PATIENT LIVED, AND IS HEALING. THE PROGNOSIS IS THAT THE PATIENT WILL BE FAR STRONGER, BIGGER, BETTER, AND MORE RESILIENT THAN EVER BEFORE.”
Just a reminder that the last time this man played doctor with this country over a million Americans ended up dying from Covid.