A Tariff Tantrum: the Upheaval from Trump’s Trade Policies

Meltdown

The markets have spoken.

The S&P 500 is on track for its worst weekly loss since the collapse of the Silicon Valley Bank crisis two years ago. And investors have wiped out post-Election Day gains as President Trump’s dizzying start-stop tariff policy fuels volatility on trading floors and in boardrooms.

Another test comes this morning with the jobs report due out at 8:30 a.m. Eastern. It’s expected to show solid growth in hiring even as federal workers brace for mass layoffs. Economic alarm bells are ringing elsewhere. Mohamed El-Erian and Ed Yardeni, two longtime market watchers, see a downturn in the making, with Yardeni warning of a “tariff-induced recession.”

Those jitters are colliding with concerns about shifting White House policy. Maximalist moves — freezing funding, axing government jobs, engaging in a trade war — that get rolled back have made it tough for world leaders and corporate chiefs to decipher Trump’s end game. Jim Farley, Ford’s C.E.O., sees only “costs and chaos” from tariffs.

A recap: Trump yesterday gave Mexico and Canada a partial tariff reprieve — exempting levies for one month on products covered by the U.S.-Mexico-Canada Agreement, the trade pact Trump signed in his first term. Presumably, that buys time to negotiate a truce, though Trump and his trade team have signaled they’re not willing to budge much.

Traders still hit the sell button. Trump, who has long cited stock market rallies as a sign his policies are working, blamed “globalists” for tanking stocks. “I’m not even looking at the market, because long term the United States will be very strong with what is happening here,” he told reporters in the Oval Office yesterday.

Tariffs and tensions are up. Trump’s levies on aluminum and steel are to go into effect next week, and next month could bring tariffs on agricultural products and automobiles. Prime Minister Justin Trudeau of Canada upped the ante, announcing countermeasures on U.S. imports and ominously predicting: “We will continue to be in a trade war that was launched by the United States for the foreseeable future.”