Donald Trump’s Tariffs are Creating Chaos: When the markets opened Monday morning in the U.S., the Dow Jones Industrial Average was down more than 1,200 points, after two straight days, on Thursday and Friday, in which the Dow dropped more than 1,000 points. The Nasdaq, at the same time, was down 600 points, with the S&P 500 dropping as well.
This all followed the announcement, Wednesday, that Trump was imposing tariffs on most of the countries in the world, in what the president called “Liberation Day.”
This followed reports starting on Sunday that markets in Asia had plunged, with the numbers also not looking great when it comes to U.S. futures.
Ackman Worries About “Nuclear Winter” Thanks to Trump Tariffs
Bill Ackman of Pershing Square Capital Management is a billionaire investor who, after a lifetime of mostly supporting Democrats, went all in on Trump in the 2024 election. But over the weekend, he appeared to break with Trump on the tariffs question.
“Business is a confidence game,” Ackman said over the weekend, “The president is losing the confidence of business leaders around the globe.” He also worried about what he described as a potential “economic nuclear winter” following the tariffs.
Ackman also alleged that Howard Lutnick, the Secretary of Commerce, is in position to profit from a bad economic downturn. Lutnick, long the CEO of Cantor Fitzgerald, is “levered long fixed income,” per Ackman, which he sees as a conflict of interest.
Bitcoin Falls, Too
It’s often been a case made for cryptocurrency that it can act as a hedge against the collapse of more traditional economic assets. But of late, when the more traditional economy has seen trouble, crypto has as well.
Per CNBC, the price of Bitcoin dropped below $77,000 on Monday morning, after it was $85,000 on Friday, as crypto joined the global rout that followed the imposition of tariffs.
Trump, considered a crypto skeptic in his first term, turned sharply toward the crypto community while running in 2024, and in March he announced plans to create a Strategic Bitcoin Reserve and United States Digital Asset Stockpile.
“Based on an Error”
Adding to the embarrassment for the president was a blog post, released on Friday, by the conservative American Enterprise Institute. Authored by AEI senior fellows Kevin Corinth and Stan Veuger, the post alleged that the president’s tariff formula “Makes No Economic Sense. It’s Also Based on an Error.”
The AEI fellows note that the tariffs are not “reciprocal,” but rather are ostensibly based on a completely different formula, “equal to the US trade deficit divided by US imports from a given country, divided by two, or 10 percent, whichever rate is higher.”
But they go on to argue that even the tariff formula, as cited by the Trump Administration, isn’t what they say it is. That’s because, due to a calculation era, the Administration has levied tariffs at about four times the level of what the formula says they should be.
Using the formula correctly, the authors say, would reduce the tariffs to no more than 14 percent for any particular country.
As of now, they are at 50 percent for Lesotho, 49 percent for Cambodia, 48 percent for Laos, 47 percent for Madagascar, and 46 percent for Vietnam.
Can Manufacturing Come Back?
Trump’s theory of the case with the tariffs is that they will encourage massive amounts of domestic manufacturing to come back online, to replace the lost output of goods coming from abroad.
White House trade advisor Peter Navarro said in a CNBC appearance that re-investment in auto parts, in particular, wouldn’t take very long.
However, CEOs surveyed by CNBC said that it won’t be quite that simple, with 45 percent of those surveyed saying that reshoring would take at least two years.
And that’s before the uncertainty comes into play about who the next president will be, and how long the Trump tariffs will last.
About the Author: Stephen Silver
Stephen Silver is an award-winning journalist, essayist and film critic, and contributor to the Philadelphia Inquirer, the Jewish Telegraphic Agency, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. For over a decade, Stephen has authored thousands of articles that focus on politics, technology, and the economy. Follow him on X (formerly Twitter) at @StephenSilver, and subscribe to his Substack newsletter.
