Déjà Vu: 2025 Tariffs Mirror 2018 Trade War PlaybookThe economic strategy behind the new wave of tariffs bears an unmistakable resemblance to the 2018–2020 U.S.–China trade conflict. That’s no coincidence. Peter Navarro, the architect of the 2018 tariff playbook under President Trump, has once again stepped into a key role shaping trade policy in Trump’s second term.
In 2018, the Trump administration launched a phased escalation of tariffs, starting with targeted duties on Chinese imports and expanding into broader measures that disrupted global supply chains. By Q4 2018, the S&P 500 had fallen nearly 20%, while tech-heavy names like NVIDIA plunged over 50% amid valuation compression, supply chain fears, and geopolitical stress.
Peter Navarro’s re-emergence signals that this isn’t just about political posturing. Known for his hardline stance on China and focus on economic nationalism, Navarro treats tariffs not as negotiation tools but as long-term policy. In 2018, that posture drove escalation until the market forced a pause.
Now in 2025, we’re watching the same script unfold almost beat for beat:
1. Start with China
2. Expand globally
3. Soften the global rhetoric to isolate China
4. Target key sectors (semiconductors, pharmaceuticals, energy)
5. Start the media misdirection to work behind the scenes with China
6. Set up a “deal” under market pressure
In 2025, the market again entered bear territory but staged a brief recovery after a pause in reciprocal tariffs. As of April 21, 2025, the index sits 16% off its February high and still in a downtrend.
Now, looking at the charts, here where things begin to take shape. Let’s start with the 2018 chart (figure 1). Like previously mentioned, back in 2018, the S&P 500 dropped over 20% between September and December, finding the bottom at a key support from 20 months prior (Q1 2017). The first gray box represents 10 weeks from the 2018 high. The 10 weeks is important because we are currently 10 weeks off the 2025 high, so this first gray box shows historically where we are today relative to the 2018 prices. The second gray box represents the 3 remaining weeks of drawdown, which was roughly 10%.
Figure 1
Now looking at the 2025 chart (figure 2), we have the same 10-week gray box marked up, and the additional 3-week, 10% drawdown, gray box that follows. Coincidentally, or not, the bottom of the second gray box aligns almost perfectly with the 0.618 Fibonacci retracement from the 2022 swing low to the 2025 high (figure 3). Even more interesting, that support level also ties back to the September 2023 high—roughly 20 months prior. Sound familiar?
Figure 2
Figure 3
I will be watching that 4500 level for SPX over the next few weeks as Trump and Navarro are preparing to roll out more sector-specific tariffs in the coming weeks. Meanwhile, Jerome Powell is facing renewed pressure, including calls to step down—again, nearly identical to the rhetoric from late 2018.
Currently, markets are pricing in just a 10% chance of a rate cut, according to Kalshi. But if the market continues to slide, Navarro and Trump may dial up pressure on the Fed to act. A rate cut in early May could mark the market bottom—just like Powell’s dovish pivot did in early 2019.
If the 2018 blueprint holds, we’re in the middle innings. Tariffs are broadening, the market is reacting, and the Fed is being boxed in. The coming weeks may test the 0.618 Fib level on the S&P 500. If Powell pivots and rhetoric softens, we may find a low—and history will have rhymed, if not outright repeated. If Powell stays strong, then Trump and Navarro may publicly pull back and take negotiations behind closed doors.
I don’t see this is being just being coincidental. This seems to be following a very familiar playbook.
