The past week mirrored a tumultuous ride for global markets, largely triggered by President Donald Trump’s new trade tariffs designed to cut the staggering $1.2 trillion annual trade deficit. These tariffs ignited a wave of concern among economists, investors, and market analysts. Here’s a distilled recap of the pivotal stories that defined the week.
Trump’s calculations regarding the tariffs drew scrutiny, with James Surowiecki from The Atlantic and Fast Company labelling the figures presented by the White House as “dumb and deceptive.” Such statements highlight the growing skepticism regarding the rationale behind these new trade policies.
Following the announcement of the tariffs, Wall Street experienced a dramatic downturn, erasing $2 trillion in market value in just one day. The largest ten companies in the U.S. alone accounted for a staggering $1 trillion loss, with Apple Inc. plunging 8.7% and nearly wiping out $300 billion in market value.
In response to the tariffs, China retaliated with a hefty 34% tariff on all imports from the U.S., urging Trump to revoke his measures and reopen negotiations. This escalation signifies growing tensions between two of the world’s largest economies.
Economist Nouriel Roubini expressed his discontent about Trump’s dubbing of the tariff day as “Liberation Day,” calling it a misuse of language that leads to lower growth and higher inflation—a viewpoint he described as “literally Orwellian doublespeak.”
Amidst the turmoil, former Treasury Secretary Larry Summers issued a stark warning that these tariffs might trigger an “oil crisis-like shock,” potentially inflating prices and increasing unemployment while constricting productive capacity.
Conversely, Commerce Secretary Howard Lutnick provided a glimmer of hope, suggesting that while the tariffs may inflict short-term pain, the long-term benefits could outweigh these challenges, leading to sustained market improvement.
Last week’s global markets were disrupted by President Trump’s trade tariffs, leading to a $2 trillion loss on Wall Street. Analysts criticised the credibility of the tariff calculations, and major companies like Apple faced severe value drops. China responded with retaliatory tariffs, while economists warned of potential inflation and economic shocks. However, some officials expressed optimism about future market recovery.
In summary, President Trump’s trade tariffs have significantly impacted global markets, resulting in a massive $2 trillion loss in Wall Street’s market value. While critics raise concerns about the long-term economic implications, such as inflation and unemployment, some officials remain optimistic about future gains despite the current turmoil. The interplay between tariffs and international relations, particularly with China, continues to evolve, highlighting the complexity of global trade dynamics.
Original Source: www.benzinga.com
