This was actually published April 5. Given the avalanche of tariff news, I claim “too busy” as my excuse. In any case, the coverage seems appropriate. Here’s CNBC on Trump tariffs. Starting with this:
Followed by this summary:
And it begins with appropriate cataclysmic language:
Before Wednesday, President Donald Trump’s tariffs were expected to be a problem for markets and the economy, but a manageable one.
So much for that idea.
What happened instead is something worse than the worst-case scenario, which previously had been one where the U.S. would slap true “reciprocal” duties on its trading partners that would match tariffs charged to American exports.
Next the timeline:
Fears around that scenario were focused on a spark to inflation and perhaps a slight slowdown in growth.
What actually emerged, though, has been economic, market and geopolitical mayhem.
It started with Trump’s Rose Garden news conference Wednesday after the market close, when the president recited, almost gleefully, his intentions to “pry open foreign markets and break down foreign trade barriers.”
And then the immediate results:
The plan: Slap 10% tariffs on every U.S. trading partner starting Saturday, with individualized rates for 60 other countries that would begin in a week. Virtually overnight, the effective U.S. tariff rate was set to spring from 2.5% to well past 20%.
For perspective, that has the potential to be the highest level since 1910 — higher even than the devastating Smoot-Hawley tariffs of 1930 that many economists see as contributing to the Great Depression, putting an exclamation point on Trump’s anti-globalist, maximalist protectionism that went beyond Wall Street’s worst fears
I’ve already plagiarized enough of the article. Read the rest. It doesn’t get better. Here’s how markets reacted. (Graphs via Yahoo! Finance.)
Fig05 RUSSELL 2000
Fig06 VIX
That last graph is the VIX, an index of market volatility. It usually hovers around 20. That number at the upper right part of the graph is 53.58. If you think it’s bad now, just wait. Monday morning, President Trump indicated he had no intention of even starting negotiations. Enjoy your 401(k).
