Is Trump’s Golden Age a Recession in the Making? Let’s Find Out“This tariff low key slaps,” says no trader ever as markets get jerked and jolted day in and day out because no one can really figure out what’s happening. On some days, US President Donald Trump wakes up and chooses to slap a tariff or two on America’s closest and biggest allies. On other days, he goes for the pardon.
Turns out, investors don’t really like it. Stock markets left and right wiggled to the point they couldn’t take it anymore — the tech-heavy Nasdaq Composite NASDAQ:IXIC dived into correction territory last week. That is, the index plunged more than 10% from its most recent peak, which was a record high.
Even though Friday was a good day for stocks, the S&P 500 SP:SPX closed out its worst week since September, wiping off 3.1%. Zoom out and you get an S&P 500 that’s barely holding above the flatline since the election. In other words, more than $3 trillion has been washed out from the Wall Street darling since it hit a record high in late February.
Where Do We Stand on Tariffs Now?
So where has the dizzying labyrinth of tariffs landed? And is that final? (No, it’s not.) Trump last week declared that there’s simply “no room left” for Canada and Mexico to bargain over a deal or even a delay. That’s a 25% levy taking effect right there. A day later it was no more — a month-long reprieve for carmakers was introduced.
Then a day later, Trump suspended the 25% levy on almost all goods from its closest neighbors. To this, Trump said that the “big” wave of tariffs is coming in early April to a bunch of countries, including the European Union. Right now, only China’s 20% tariff remains in place.
The roller-coaster ride around who gets slapped with what has sent the dollar TVC:DXY in a freefall — so much so that the markets have started to chat about a “Trumpcession,” (not something you’d like to have your name on). That is, some traders and investors expect Trump’s policies to tip the American economy into a recession.
Swirling fears of a downturn came right as the Federal Reserve apparently managed to stick the soft landing — Jay Powell and his clique of central bankers lowered inflation through interest rate cuts while the economy continued to grow without nosediving into a downturn.
A side worry of the tariffs (with very real front-and-center consequences) is a pullback from the Federal Reserve on its rate-cutting campaign. Analysts are quick to say that the US central bank won’t be looking to trim borrowing costs any time soon. Not with all that White House noise threatening to derail consumer confidence and dent corporate profits and revenue.
Apparently, the huge wave of uncertainty around Trump’s tariff agenda, centered on isolation and protectionism, is making global investors nervous.
In this context, how are you navigating the sea change? What’s your portfolio showing and how do you feel about growth prospects ahead? Share you thoughts in the comment section and let’s chat!
