Stock market crashes deterred Trump in the past, but it is looking increasingly likely it’s no longer a deterrent.
During the Trump 1.0 presidency, stock market crashes were pretty commonplace. In fact, by the end of his first term, Trump managed to notch all 20 places for biggest single day Dow Jones Industrial average point drops.
It was a sign that Trump was an unmitigated disaster when he was president back then. It took a Herculean effort on the part of the Democrats to fix all the damage caused by Trump 1.0 (and, arguably, not everything even got fixed, but the economy was finally back on track in the last year of the Biden administration). Unfortunately, Trump is now back in the White House and, much like the Trump 1.0 term, the Trump 2.0 term is marked with even more regular stock market crashes and an economy going down the golden toilet.
Trump apologists are likely to point out that the stock market crashes in the previous term weren’t all his fault. After all, the COVID-19, which was mishandled by Trump thanks to the 1 million people killed, was spreading like wildfire and lockdowns did also cause volatility. The problem is that, this time, Trump doesn’t (yet) have a global pandemic to shield his pure idiocy.
Since Trump took over again, Trump has been on a campaign to hit all of America’s allies with tariffs because he doesn’t have a clue how economics work and intends on burning all of America’s bridges. There have been bi-partisan Canadian envoys to the US to explain how the real world works. For example, Canada US relationships have helped both economies. There have been business leaders in the US trying to explain how the real world works. For example, how they will be negatively impacted. There have been experts trying to explain how the real world work. For example, how tariffs will send the cost of everything and inflation through the stratosphere. Unfortunately for all of the above, they are using logic and reason and Trump has never responded well to either.
So, the real question is, what is a viable deterrent to Trump being a complete and total dumbass on international economics? Well, as it turns out, it was the stock markets proving all of the envoys and experts correct (naturally). In early February, Trump moved ahead with the idiotic 25% tariffs. Canada responded by issuing retaliatory tariffs. Predictably, the stock markets crashed. When Trump saw the markets crash on Fox News, he panicked and lifted the tariffs for 30 days. This resulted in a stock market recovery shortly after.
Those 30 days elapsed and the tariffs were back on. Canada defended itself from the bully in response. The stock markets crashed with the DOW Jones plummeting 1,300 points in 2 days. Trump saw the stock market crash on Fox News, freaked out, and partially lifted the tariffs.
At that point, Trump started looking at individual sectors for what to tariff that won’t crash the stock markets. One of those was lumber and dairy. After saying he would enact those, the markets crashed again with the DOW Jones cratering by 900 points on one day and another 500 points the very next day. As a result, Trump panicked after seeing the news on Fox News and decided against going ahead with those tariffs.
Another one he floated was steel and aluminum tariffs. Trump implemented them shortly after the previous stock market crash. Sometime after, the markets crashed yet again by another 500 points on the Dow Jones industrial average. The problem that time was that the tariffs didn’t get taken back off, raising the possibility that the last deterrent of Trump sending the US economy off the cliff is no longer proving to be a deterrent.
This is, of course, bad news because it’s not clear if anything will be stopping Trump from cratering the entire US economy and sending the stock markets down with it. Like the SS America, the stock markets are going down today. This in response to the automobile tariffs set to kick in early next month. From FXStreet:
The Dow Jones Industrial Average (DJIA) backslid over 700 points on Friday, falling 1.75% and tumbling to 41,500 after core Personal Consumption Expenditure (PCE) inflation figures accelerated in February. Consumer inflation fears rose in March, and the consumer outlook on economic conditions also deteriorated further as tariff fears continue to take a bite out of general sentiment.
As of now, we hadn’t heard anything about Trump reversing the automobile tariffs, so, it’s looking that it wasn’t a deterrent for Trump this time around so far. As a result, unless something dramatically changes and Trump reverses the tariffs again, it’s looking like everyone will be paying the price for Trumps obvious incompetence.
I know some mainstream media outlets in Canada are pointing to Trump’s phone call with Prime Minister Mark Carney and saying that it’s a positive sign that both are calling it “productive”, but those comments ultimately mean squat because the same things were being said when Trudeau was Prime Minister and yet the tariffs started going through anyway. That’s not something to get your hopes up over. Unless there is a substantive change on the tariff front, then positive words won’t mean anything.
Ultimately, all signs are pointing to the idea that Trump really is starting to no longer care what the stock markets are doing. If the crashing stock markets aren’t a deterrent for Trump, then it’s difficult to see if anything is going to be a deterrent for Trump. As a result, all of those tariffs are going to go through, cause all the economic chaos experts were saying they would cause all along, and everyone is going to be in a world of hurt.
