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Trump’s tariff-driven market crash, briefly explained
The Dow has lost more than 4,000 points since the president rolled out his tariffs.
Patrick Reis was the senior politics and ideas editor at Vox. He previously worked at Rolling Stone, the Washington Post, Politico, National Journal, and Seattle’s Real Change News. As a reporter and editor, he has worked on coverage of campaign politics, economic policy, the federal death penalty, climate change, financial regulation, and homelessness.
Welcome to The Logoff: Today I’m focusing on the economic fallout from Donald Trump’s tariffs, as the consequences of the president’s largely unchecked power are becoming clearer and more alarming.
What’s the latest? After more losses today, the Dow is down more than 4,000 points since Trump rolled out his tariffs on Wednesday afternoon. The markets last dropped like this in 2020, when the economy was being systematically shut down to fight Covid-19.
What’s next? The 10 percent, across-the-board tariffs took effect Saturday. The targeted, higher tariffs on specific nations go into effect April 9.
And more tariffs could be coming. After China threatened to retaliate against Trump’s new tariffs with a 34 percent tax on US goods, the president threatened an additional 50 percent tariffs on Chinese goods unless Beijing pulls back. It’s the latest sign Trump’s tariffs have started a global trade war.
Can anyone stop Trump’s tariffs? A handful of Senate Republicans are backing a bill that would curtail Trump’s authority to impose tariffs without Congress’s blessing. But even with all the Democrats on board, the legislation doesn’t have enough support to override Trump’s promised veto and seems unlikely to become law.
What’s the big picture? Even before Trump took office, observers debated whether his talk of massive tariffs was a bluff or a blueprint. It seems investors were betting on the former, and now that the tariffs are going into effect, the financial shocks are real.
How bad is this going to get? That depends largely on Trump. He has said that other nations are sending teams to negotiate, which means there’s still a chance that some of the tariffs could be canceled. But if any significant chunk of those taxes moves forward, economists predict higher prices and slow economic growth — if not an outright recession.
And with that, it’s time to log off…
If you’re in need of a distraction, let me point you to this incredible livestream of a bald eagle nest — complete with two eaglets — in California’s Big Bear Valley. (And thanks very much to the reader who emailed to suggest this!) If the market upheaval has you wondering what to do, my colleague Allie Volpe has a great piece about how to start an emergency fund for tough times. Thanks so much for reading. See you back here tomorrow.
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