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/Acolyte_of_Swole 3d ago

The poorest will pay the largest percentage of the tariff tax. The rich can largely avoid paying. Reminder that US-made goods are also the most expensive goods. I like owning US-made products but the reality is we're talking about consumer goods that are just too expensive for some people. But not the rich.

The rich won't feel the tariff pain because they already have more money than they can spend without a concerted effort. The moderately rich will be unhappy (because of stock losses) but will weather the storm fine. It's the bottom 90% of society that will be absolutely crushed by this trade war. Housing and cost of living are already unaffordable. Now cheap consumer goods are going away too. RIP

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u/PersnickityPenguin 3d ago

I just bought new $180 work boots.  I wanted to get the American made ones, but they were $400+ per pair.

Very high quality, very pricey.

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u/Inz0mbiac 3d ago

They may weather the storm, but even rich people despise losing 20% of their portfolio. Its going to be a very interesting couple of months coming up.