Surprisingly, the stock market crash has paused. As a result, it looks like the steel and aluminum tariffs have moved ahead.
We’ve been following the moron in chief, Donald Trump’s efforts to wipe Canada off the face of the Earth by attempting to bankrupt it through unnecessary tariffs. A pattern in all of these on again off again tariffs have emerged through all of this and keeps seemingly being confirmed with every action and reaction. That is that the one thing that deters Trump from enacting his ridiculously stupid tariffs is if the stock market crashes in response or not.
The pattern can be traced all the way back to January. In January, Trump announced that he was going to implement an across the board 25% tariffs on Canada and Mexico with an additional 10% on China. The move was so outrageously stupid, that many people had a hard time believing that he would really be dumb enough to enact such a thing. The thing is, Trump proved everyone wrong as he made it clear that he really is that bigly stupid. When it comes to being a dumbass, no one has ever seen a bigger dumbass than Trump and Trump was going to prove that to everyone. So, in Trumps infinite stupidity, he enacted his idiotic tariffs.
In response, Canada issued a response by initiating retaliatory actions. With word reaching Wall Street, the US stock market crashed. After likely witnessing the stock market crash, Trump panicked and implemented a 30 day pause on those tariffs.
In response, people started trying to figure out what got him to back off the cliff of stupidity. Was it the messaging Canada was sending? Unlikely. Was it the countermeasures? That played a role in it. At any rate, Canada had 30 days to formulate a more refined response if Trump returned to the cliff of stupidity. Sure enough, he did return to that cliff. Trump let the tariffs resume after 30 days. Canada, correctly, issued retaliatory measures. In response, the stock market crashed much harder with a two day loss of 1,300 points on the DOW Jones. After presumably seeing that news hit Fox News, Trump, once again, panicked, and partially lifted the tariffs again.
While the markets have yet to recover from the Trump insanity, Trump was pushing various more specific tariffs. It was becoming clear that he was trying to figure out, through trial and error, which tariffs would crash the stock markets and which ones won’t. So, one of the tariffs he was floating was one on lumber and dairy. He said that he would enact those on Monday or Tuesday. On Monday, the stock markets crashed again with a nearly 900 point drop on the DOW Jones. In response, the dairy and lumber tariffs simply didn’t materialize. Yesterday, on Tuesday, the other day Trump floated, the stocks continued to crash with another nearly 500 point drop on the DOW Jones. Once again, the dairy and lumber tariffs failed to materialize. As a result, there was a big question mark on if the lumber and dairy tariffs were going to materialize at all.
Another idea Trump floated was the steel and aluminum tariffs. Those were set to take place today. Well, as of midnight this morning, those tariffs went ahead. From CNN:
President Donald Trump imposed sweeping 25% tariffs on all steel and aluminum imported into the United States Wednesday, a policy aimed at leveling the playing field for US manufacturing but a move that threatens to drive up prices on a broad range of consumer and industrial goods for Americans.
So, what did the US stock markets do? Well, they didn’t continue the crash that has been going on for two days. From IBD:
The Dow Jones Industrial Average tried to whittle morning losses down while other indexes closed firmly in positive ground Wednesday amid cooling inflation.
The S&P 500 posted a 0.5% gain on Wednesday. Leading the pack, however, was the Nasdaq, as the tech-heavy index added 1.2%. Both the S&P and Nasdaq broke a two-day losing streak.
Small caps on the Russell 2000 rose 0.3%. The Innovator IBD 50 (FFTY) exchange traded fund added 1.1%.
Volume was lower on both the New York Stock Exchange and Nasdaq exchange compared with the same time on Tuesday. Decliners lagged advancers 5-to-4 on the NYSE and 3-to-2 on the Nasdaq.
So, no crash, the key component of what has long pushed Trump back from the edge of idiocy. So, the steel and aluminum tariffs, sadly, stayed. Maybe this is a dead cat bounce where the markets bump up from hitting a false bottom, but who knows at this point? At any rate, it is likely that Trump didn’t see a stock market crash on Fox News and he feels that he got away with it this time after a string of largely failures.
In response, other nations have announced that they would be hitting back. This includes Europe and Canada. From the Associated Press:
Major trade partners swiftly hit back at President Donald Trump’s increased tariffs on aluminum and steel imports, imposing stiff new taxes on U.S products from textiles and water heaters to beef and bourbon.
Canada, the largest supplier of steel and aluminum to the U.S., said Wednesday it will place 25% reciprocal tariffs on steel products and also raise taxes on a host of items: tools, computers and servers, display monitors, sports equipment, and cast-iron products.
Across the Atlantic, the European Union will raise tariffs on American beef, poultry, bourbon and motorcycles, bourbon, peanut butter and jeans.
Combined, the new tariffs will cost companies billions of dollars, and further escalate the uncertainty in two of the world’s major trade partnerships. Companies will either take the losses and earn fewer profits, or, more likely, pass costs along to consumers in the form of higher prices.
So, basically, Europe is now experiencing what Canada has endured for the last few months and has seemingly done what Canada is doing in response. On a side note, I don’t know why bourbon was mentioned twice in the above quote.
Now, it’s entirely possible that the markets could continue a massive slide tomorrow in response to all of this. After all, a delayed reaction by a day or two isn’t something that is a novel concept for the markets as far as I can tell. So, it’s entirely possible we could see another crash further down the line. If that doesn’t happen, though, then it’s likely that the steel and aluminum tariffs are here to stay for the foreseeable future. Hopefully, that doesn’t happen.
