r/investing • u/Mountain-Taro-123 • 4d ago

SP500 sinks 4% after Trump's liberation day tariffs, China vows to retaliate on Trump's 54% tariffs, stoking investor fears of a global trade war and recession

It's been noted that the US retaliatory tariffs are not based on other country's tariffs, but rather the import/export trade deficit that the US has with said countries

SP500 is down 4% with consumer tech (Apple), apparel and clothing (Nike and Lululemon), and retail (Dollar General and Walmart) that source many products and parts from China down / hit the hardest

China and other countries are vowing to retaliate with their own tariffs against the US sparking fears of a global trade war and recession.

Noting the last time the US enacted sweeping tariffs through the Smoot-Harwley Tariff Act (which had lower average tariff amounts than those announced yesterday), it lead to a global trade war, reducing imports/exports, failed to bring back manufacturing jobs to the US, and caused the Great Depression. Will history repeat itself?

https://www.ft.com/content/f820e191-348c-4298-b15f-49600be843ce

https://www.china-briefing.com/news/trump-raises-tariffs-on-china-to-54-overview-and-trade-implications/

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u/JefferyTheQuaxly 4d ago

the only reason the market hasnt crashed more is because the market still somewhat expects trump to be rational and get rid of the tariffs within a week or so.

of course that is very dumb, but thats what the market seems to hope still.

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u/Ok_Parsnip_4583 3d ago

Isn’t that what the Trump advisors are saying though? That basically this is essentially a stick being used to get other countries to the table? They claim that is essentially what happened last time. Don’t know enough myself to fact check that however…

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u/Mjolnir2000 3d ago

These last few months have done wonders in destroying the notion that it's all "priced in". No, investors are irrational actors driven be emotion, just like everyone else. We're looking at denial, not an "efficient market".

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u/ALth0r 3d ago

This. 100 %. and because the market is very slow to react. There is however, a fair chance that he changes his mind in the next months.