Trump’s Tariffs: It’s Not Just the Stock Market That’s In Trouble
President Donald Trump’s tariffs vaporized $6 trillion in value from the stock market in just two days of trading last week—and the bloodbath continued on Monday morning.
Here’s the bad news: That’s not the end of the bad news.
As ugly as the stock market losses have been, the big hit from Trump’s tariffs probably haven’t even arrived yet. As always, the stock market is not the economy—it’s an aggregated indicator of what investors think the economy will look like in the future. Right now, they think it will be bad. Really bad.
It’s hard to blame them. In addition to crashing Americans’ retirement accounts and wiping out huge amounts from American companies (Apple and Nike were among the biggest losers in Friday’s rout), Trump’s move will soon raise taxes, wreck supply chains, and make basic goods more expensive or difficult to obtain.
In other words, even if you aren’t affected by the stock market sell-off, you’ll feel the effects of the tariffs before long.
Take each of those things in order. First, the tax increase. Tariffs are a form of taxation. According to the Yale Budget Lab’s analysis, Trump’s tariffs will reduce the average household’s income by nearly $3,800 this year. That’s because lots of things will get more expensive. Tariffs could triple the cost of a new iPhone, for example.
Second, the supply chain chaos. Ryan Peterson is the CEO of Flexport, a tech platform that helps companies with global logistics. He reported last week that 28 percent of the companies in Flexport’s system are “pausing all ocean freight bookings from Asia until there’s more clarity on where tariffs will end up.”
That means that even if some American comp
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