r/investing • u/Mountain-Taro-123 • 3d 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
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u/saganistic 3d ago
I have commented this on other posts, but it continues to be relevant:
Trump views every negotiation—whether real or it’s just him shouting into the void—as distributive. I.e., there is only so much pie, there is no alternative, and whoever gets the most is the “winner”. Even better if you can get the whole thing. It’s zero-sum. This appeals directly to his narcissism.
However, the rest of the developed world view those same negotiations as integrative, which typically means multilateral. You get some of our lumber, they get some of your copper, we get some of their corn. Everybody wins. And if one party doesn’t want to play anymore… we can find others that do.
Trump literally does not understand that framework, and even if he did he’d hate it anyway because he should be the only one that “wins”, ever. Anyone else doing so, even if it doesn’t affect him in the slightest, means he is not the biggest strongest boy. And as a fundamentally weak and scared person, that is the most terrifying thing in his universe.