Stocks continue to fall as the President issued new tariffs, landing U.S. Citizens in the middle of a trade war. On Monday, Wall Street fell steeply as the trade war escalated after aggressive tariffs were placed. People are worried about the money they have invested in the stock market, especially those expecting to retire this year. When the market tanks, you are told not to panic and pull out because it will rise again. But what are retirement-aged people expected to do in this situation? If President Trump continues on this path, there will not be enough time for these people to get back what they lost.
The President Reacts
The markets went up and down as S&P fell below 20% and entered “bear market” territory on Monday. However, when a rumor spread through the media that Trump was considering a pause on the tariffs, the markets skyrocketed. Relief was felt briefly until the White House debunked the news, and they began to drop again.
President Donald Trump insists that tariffs are the right way to go and “will make this country very rich.” He confirmed the rumor was false and he has no intention of pausing the tariffs, as it was never a consideration. He told reporters at the White House, “I don’t mind going through it because I see a beautiful picture at the end.”
While Trump may not be concerned with the constant fluctuation of the market, the people who are affected might have something else to say. People, including U.S. citizens, investors, economists, and government officials, are questioning and criticizing his plan to allow the markets to plummet. Last week, $6.6 trillion was wiped out of the stock market.
Ongoing Trade War
On Saturday, 10% tariffs took effect against dozens of countries, and they could face higher tariffs in return for their opposition. China threatened to impose a 34% tariff on all goods imported from the United States after being hit with a near 35% increase on Chinese goods. In return, Trump threatened them with an additional 50% tariff, kicking off yet another trade war with another country. In total, the tariff towards China would be 104%.
Most have trouble with President Trump’s economic plans because of the uncertainty and confusion. There has been no concrete answer whether these tariffs are for longevity, temporary, or subject to negotiation. Trump confirmed they could be any one of those options, leaving the citizens and government officials more confused than ever.
We are currently in the middle of the highest average of effective tariffs since 1909, at 22.5%. The stock market is seeing the steepest decline in the last five years, and despite warnings from economists, the trade wars continue. Economists warn that if we continue imposing broad tariffs, inflation will increase and hurt the growth of our economy.
