- Trump imposed widespread tariffs on countries worldwide including uninhabited territories, causing market downturns across stocks and cryptocurrencies.
- Despite Trump’s claims that tariffs will revitalise American manufacturing and “make America wealthy again”, economic experts argue this strategy is flawed and could instead trigger supply chain disruptions and inflation.
- Following the tariff announcements, JPMorgan raised its recession risk assessment from 40% to 60%, while prediction markets show 53% of bettors now expect a US recession in 2025.
- Trump’s approval rating has dropped to 43% amid market turmoil, with the S&P 500 showing poor performance since his inauguration, marking one of the worst presidential term starts in recent history.
In his declaration of a sweeping set of tariffs, Trump has slapped import taxes on almost every place in the world, including the Heard Island and McDonald Islands – an external Australian territory entirely populated by Penguins.
It is unknown if the Penguin regime is planning retaliatory tariffs, but other countries are.
The tariffs come as Trump said other countries had been “taking advantage of the US for years”. However, the situation is not exactly as Trump portrayed it. While it’s true that countries impose varying tariffs on imports, including sales taxes in that calculation is misleading.
Lutnick Says VAT Tax Unfair, Despite Evidence Pointing to Contrary
It appears that the Trump administration is confusing GST (Goods and Services Tax) and VAT (Value-Added Tax) with tariffs, when in fact GST and VAT get levied on any product sold, be it domestic or from overseas.
In any case, Trump’s plan aims to bring manufacturing back to the US. Although this may seem beneficial at first glance, it is not straightforward, as Spencer Hakimian, founder of Tolou Capital Management, explains:
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In the short term at least, what Trump’s tariffs did was tank the markets. Most stocks and major indices are down, with crypto not spared. Bitcoin and most major crypto assets plunged following the announcement, with few exceptions.
Prior to being re-elected, Trump used to say that people would be tired of winning. That’s probably not how most investors feel right now.
But odds are we aren’t out of the woods yet. With several countries announcing retaliation against the tariffs, nobody knows if Trump will back down or double down.
Bettors Believe in Recession Risk Rise, JPMorgan Agrees
Pundits on Polymarket for one, believe that a US recession is coming in 2025, with 53% believing so. The odds have skyrocketed following the historical events in the rose garden of the White House.
JPMorgan for one has increased its recession risk rating from 40% to 60%, adding that the impact of Trump’s tariff could be amplified by “retaliation, supply chain disruptions, and a sentiment shock”.
Trump meanwhile tried to spin the tariffs as a win for the US, saying they would “make America wealthy again”. Some analysts believe this could send inflation to new highs, with Bloomberg suggesting we could expect “pandemic levels”.
The president had promised to bring consumer prices down. What is down however, is Trump’s approval rating, which has taken a hit and dropped to 43%, as per a poll by Reuters.
Trump’s return to the White House is turning out to be one of the worst starts in recent history.
We truly aren’t tired enough of winning yet!
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