President Donald Trump’s sweeping new tariffs are drawing blistering criticism from economists and market analysts, with CNBC’s Steve Liesman calling the move a “self-inflicted catastrophe” that could plunge the country into recession.
Appearing on MSNBC’s All In with Chris Hayes Friday night, Liesman warned that the markets are reacting to a grim economic outlook sparked by Trump’s latest trade actions.
“If you take a step back, what’s really happening here, Chris, is the market is pricing in the high probability of a recession,” Liesman said. “That’s really what this is all about right now.”
On Wednesday, Trump announced a new tariff structure that imposes a 10% baseline tariff on nearly all imported goods. Certain countries were hit with significantly higher rates, and a 25% tariff was placed on all automobile imports, igniting fears of a full-blown trade war. The markets reacted quickly: the Dow Jones Industrial Average dropped nearly 4,000 points over two days, and JPMorgan analysts now place the odds of a tariff-induced recession at 60%.
“The Titanic hit an iceberg by accident,” Liesman said. “This is the equivalent of steering the Titanic toward the iceberg.”
He added that the market is not anticipating any long-term economic benefit from the tariffs: “The market prices in future values, and that’s not happening. What’s not happening is the market pricing in some form of ‘golden age’ where manufacturing comes back to America.”
Liesman pointed out that between $7 trillion and $10 trillion in stock market value has been lost since Trump took office in January.
Adding to the unease, Liesman noted that many investors had hoped Trump’s aides would act as a moderating force on policy — a hope he now believes is unfounded.
“Well, that’s gone,” he said. “The adults have left the room, is maybe one way to put it.”
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7 Responses
Not saying he’s toatally wrong since markets indeed price gauge near term (3-6mo or 1-2 future quater result) expectations vs long term. Eventhough, CNBC & CNN are the worst TDS channels, more center WSJ is also in agreement in this case.
Maybe voting for a convict and unrepentant insurrectionist wasn’t such a good idea after all.
Well
Here is what’s happening. The liberal and fake media is trying to destroy Trump. What the liberals did to the economy was throw billions of tax payer dollars for climate change. They think they can control the sun. So money is wasted on do nothing idiotic professors who milk the system with their idiotic nonsense. So much money is wasted on convincing young boys to become girls and visa versa. These bums who are destroying young kids are crying now that Trump is cutting their funding. Trump is also cutting funding to colleges that allow Arabs and others to attack Jewish students. Bravo Trump. Keep up the good work. Trump wants to cut our citizens taxes by getting rid of trillions of wasteful spending.
Heimisha guy: All that’s very nice and good, but completely not relevant to the discussion about tarrifs. One can agree with every word you just said and still see with your own eyes that the markets are tanking. The thing is that when it comes to the economy, what other people think matters, since it’s other people who are deciding how where and when to put their money. If this news source or that news source successfully scares people into not putting there money here or there because they’re worried about the effects of the tariffs, that’s something that Trump and co could’ve predicted would happen as a result. Therefore they should’ve predicted that the economy would suffer. If it turns out that the economy does tank in a major historical way, then Trump and co will be responsible, even if it was wholly because certain ‘enemies’ of Trump and Co successfully influenced enough people to move their money around in a certain kind of way. Trump will be responsible because he either didn’t predict that that might happen, or he did it anyway.
Trump has always been good at declaring victory (even if he lost) and changing policies. The crash of the stock market, representing what the middle and upper classes think of the situation (since poor people rarely own stock) will be perceived by him as a warning. The most likely result of a massive tariff increase is higher prices for consumers and reduced exports (though in many cases, companies unable to sells goods abroad will be forced to discount prices and sell the goods domestically). Already some countries are offering to cut deals to lower tariffs in return for the US doing the same, so it is in no way certain what the situation will be. He has 18 months before the next election.
This will be opportunity for the heimisha oilem. When prices start to fall like in real Estate more people will be able to invest and buy buildings. All the unneeded junk people waste their money on will be unavailable and kids will not be further spoiled.