On Thursday afternoon, the president posted on social media “I think it’s going very well—The MARKETS are going to BOOM…”
The next day the markets went “BOOM” all right, plummeting for the second day in a row in response to the White House tariff announcement.
The two-day loss in shareholder value was the greatest in history – approximately 5 trillion dollars ($5,000,000,000,000). About 62% of Americans have their money in the stock market – for many Americans, their life savings have been affected.
The president’s social media account yesterday posted a video saying that he had crashed the stock market on purpose as some kind of three-dimensional chess move.
According to the tariff announcement, 10% tariffs on all imported goods go into effect today. Much higher nation-specific tariffs are scheduled to go into effect on April 9. China’s retaliatory tariffs of 34% on U.S. exports to China are scheduled for April 10.
J.P. Morgan noted that the cumulative U.S. tariffs (exclusive of any retaliatory tariffs) average about 22% – making them equivalent to the largest tax increase in the U.S. since 1968.
Barclays, after forecasting in February that inflation would continue to fall, has now revised their 2025 inflation estimate upward by 14% over their January estimate – and they now expect GDP to fall and unemployment to rise this year.
J.P. Morgan Chief Global Strategist David Kelly says there is at least a 60% chance of recession if these tariffs remain in place. Gregory Daco, chief economist at EY-Parthenon, said his base case is now stagflation – a toxic mix of rising inflation and slowing growth.
This is not just another cyclical economic downturn but rather an unprecedented blow to the global economic system caused by deliberate policy choices.
And unless the people and the Congress act to stop these policies, the consequences are far from over.
Rebecca Patterson, a former hedge fund strategist now at the Council on Foreign Relations, warned that the “stock market bloodletting could continue” if foreign governments retaliate further or if incoming economic data worsen.
As Mark Newton of Fundstrat Global Advisors pointed out “Given the ‘elephant in the room’ of tariffs… it’s nearly impossible to call a bottom [for stocks] without evidence of progress” on the trade front.
And don’t fool yourself that this is only a problem for the investor class.
Recessions hurt average Americans the most.
In a recession, unemployment rises as businesses lay off workers or freeze hiring. People in jobs like construction, retail, hospitality, and manufacturing are hit first and hardest.
Even those who keep their jobs experience reduced hours, canceled bonuses, or wage freezes. Freelancers, gig workers, and small business owners see a drop in income.
And with this recession in particular — with prices skyrocketing on all imports — inflation will worsen, creating a painful combination of high prices and falling income — stagflation.
Working people will find it harder to pay their debts and bills, will have to stop contributing to retirement or borrow from savings to cover emergencies.
There will be higher rates of anxiety, depression, and family stress as financial strain affects personal relationships, sleep, and physical health.
All because of the deliberate misguided policies of one man. And the unwillingness of the Congress to stop him.