Like the implementation of Trump tariffs has changed into stock market chaos

Before Wednesday, the tariff of President Donald Trump was to be a problem for markets and the economy, but possible to master.

So much for this idea.

Instead, something worse than the worst scenario happened, which was previously one in which the US would hit real “mutual” duties on their trading partners that would match the tariffs covered by American exports.

In an excellent world, this would cause a round of negotiations that led to transactions with which all parties could live as part of Trump's efforts to change the trajectory of global trade, Reshore American jobs and the transformation of the United States on the dependence on cheap foreign imports and lavish government expenditure to the production economy.

Fears around this scenario focused on sparks of inflation and perhaps a slight slowdown in growth.

However, what appeared is economic, market and geopolitical chaos.

It started with Rose Rose Garden press conference on Wednesday After closing the market, when the president recited, almost with joy, his intentions “undermining foreign markets and breaking trade barriers”.

Plan: hit 10% tariffs at each American trading partner from Saturday, with individual rates for 60 other countries that will start in a week. Practically overnight, the effective index of American tariffs was set at 2.5% to 20% well.

In retrospect, this can be the highest level from 1910-even than the destructive Smoot-Hawley tariffs from 1930, which many economists consider a great crisis, putting an exclamation mark on Trump's anti-globalist, maximalist protectiveism that went beyond Wall Street.

Rapid reaction

If Trump played chicken with the rest of the world, he lost the first.

China took revenge with 34% tariffs On all goods, the leaders of the European Union also consider remedies, and suddenly antagonistic relations with Canada and Mexico will have to be smoothed during United States Agreement-Massyk-Tanada Conversations in the coming months.

Markets referred to events by sending supplies to cruel two -day sale This placed the NASDAQ composite, in which the powers of the Silicon Valley live, which Trump flooded at the beginning of his second term, for bears.

Meanwhile, economists were Terrified in basic mathematics This concerned the calculation of tariffs. Basically, administration in the plan Washington Post reported He was cooked up to three hours before the announcement, he simply shared the commercial deficit with individual countries by the total value of US exports to develop “mutual” tariffs that do not seem to meet their settlements.

According to the Center for Strategic and International Studies, the formula “High deficit trade partners will punish from which the United States imports a lot and buy little, not necessarily those with the most restrictive trading systems. “

“In short, the formula provides difficult justice at best, in the worst case blunt strength,” said the center in the analysis.

Market beating

Investors answered by selling everything except bonds. After all, how can anyone know what the right price for future earnings is, when now it is practically impossible to determine future earnings?

In the best Trump scenario, other countries will come to the table and lower tariffs, opening markets for American goods and enabling the US to access their markets. Even then, it will require a huge reclamation of the economy, which in 2024 occurred 68% of consumer expenditure and had a sales deficit of $ 903 billion.

There were certainly some early negotiations.

Asset He boasted on Friday at Truth Social that he had a “very productive call” with the Vietnamese leader of the communist party to Lam, who allegedly agreed to lower the tariffs to zero, if the contract could be concluded in the USA, Trump revealed Further interest in the conclusion of a contract with China on TiktokPotential Linchpin in solving the escalation of tensions between two sides.

“Only weak will disappoint!” Trump announced on Friday afternoon about social truth.

Although the stock exchange certainly did not disappoint during the week, it surrendered about $ 6 trillion of value as Industrial average Dow Jones He blew over 3,900 points during the two -day period, which has never been done before.

Investors looking for a federal reserve to rescue remained on Friday when Indicated by the chairman Jerome Powell Tariffs more difficult than expected would be growth growth and, more importantly, would increase inflation. Powell confessed that the central bank would remain in its maintenance patterns in terms of interest rates, and for now “Fed Fed put” the floor under the market thing.

“I think this is the biggest politics mistake for 95 years”, professor of school Wharton Jeremy Siegel said Friday on CNBC. “This is a self-proclaimed wound. This is an unforced mistake-it didn't have to happen.”

Despite this, the number crispy in the traders of Almanac does not see the upcoming full -fledged Bess, noting that corrections such as the current ones transform into bears a third of the time.

But it depends on the president who was delayed in his current position, swearing Friday that his “politics will never change.”

Trump fans can play such a definite goal, but it is also the most frightening the market.

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