Before Wednesday, President Donald Trump’s tariffs are expected to be a market and economic issue, but manageable.

So many ideas for this.

Instead, what happened is worse than the worst, a situation where the United States had previously cracked down on its trading partners’ real “countdown” duties that would match the tariffs charged by U.S. exports.

In a perfect world, this will trigger a round of negotiations that can be tolerated by all parties to change the trajectory of global trade, improve the trajectory of American work, and transform the United States from relying on cheap foreign imports and luxury government spending to a production-centric economy.

Fear of this situation is focused on the spark on inflation and may slow growth a little.

But what actually happens is economic, market and geopolitical chaos.

It begins with Trump’s Rose Garden News Wednesday After the market ended, when the president recited his intentions with almost joy to “plitting open foreign markets and breaking foreign trade barriers.”

The plan: Starting Saturday, each U.S. trading partner will have to reach 10% tariffs, and personalized interest rates in 60 other countries will begin within a week. Almost overnight, the effective U.S. tariff rate rose from 2.5% to over 20%.

From a perspective, this has the potential to be the highest level since 1910 – even higher than the devastating chaotic tariffs of 1930, which many economists believe helped the Great Depression, which brought a surprising view to Trump’s anti-globalist majestic attacks, which made the greatest fear beyond Wall Street.

Quick response

If Trump plays chicken with the rest of the world, he loses the first round.

China Retaliation with 34% tariffs On all commodities, EU leaders are also considering countermeasures, and antagonistic relations with Canada and Mexico suddenly must smooth during the period United States-Mexico Agreement Talks in the coming months.

Retreated development projects in the market, send stocks into A vicious two-day sale This makes Nasdaq Composite the home of the Silicon Valley name Trump courted early in his second term, a bear market.

Meanwhile, the economist is The troubles of basic mathematics That is the tariff calculation. Essentially, the government is planning According to the Washington Post It was not cooked until three hours before the announcement, just to divide the trade deficit with individual countries into the total value of U.S. exports to design “reciprocal” tariffs that do not appear to be in line with their billing.

According to the Center for Strategic and International Studies “Punish high defect trading partners The United States imports a lot from it, and hardly buys it from it, not necessarily those with the strictest trading system. ”

“In short, the formula provides rough justice at best and blunt force at worst,” the center said in an analysis.

Market defeat

The investor’s response is to sell everything except bonds. After all, who can know what the appropriate price to pay for future earnings is that it is almost impossible to figure out future income now?

In Trump’s best case, other countries will list and lower tariffs, open up markets for U.S. goods, and allow the U.S. to enter its markets. Still, even then, it still requires a massive economic transformation, which owes 68% of consumer spending activity in 2024 and has a trade deficit of $9003 billion.

To be sure, there were some early negotiations.

trump card Boasting about the truth on Friday Social Trump revealed that he had a “very productive call” with the Vietnamese Communist Party leader and allegedly agreed to lower tariffs to zero if a deal could be reached with the United States. Further interest in reaching a Tiktok agreement with Chinapotentially key in the escalating tensions between the sides.

“Only the weak will fail!” Trump announced the truth on Friday afternoon socializing.

While the stock market certainly didn’t fail in a week, it did surrender about $6 trillion in value Dow Jones Industrial Average More than 3,900 points of bleeding over a two-day period, which is never done.

Investors looking to get Fed car rescue left what they want on Friday Jerome Powell says Tariffs that exceed expectations will weaken growth and, more importantly, increase inflation. Powell claims that the central bank will maintain its interest rate holding model, and the Fed is currently putting the floor under the market massacre.

“I think this is the biggest policy mistake in 95 years,” Wharton professor Jeremy Siegel Said Friday On CNBC. “It’s a self-inflicted wound. It’s an uncompulsory mistake-it doesn’t have to happen.”

Still, the digital tighter of the stock exchange yearbook did not see a mature bear market coming, noting that corrections like the current bears will only turn into a third of the bear.

But it depends on the president who has been in a stubborn state in his current position, vowing Friday that his “policies will never change.”

This resolute purpose may play a role for Trump supporters, but it is also the most scary market at the moment.

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