Tariffs are taxes. Tariffs are usually – almost always – crony. Tariffs raise prices for American consumers. Tariffs encourage other countries to raise tariffs thereby making it harder for us to sell things overseas. Tariffs were one of the reasons The Great Depression happened, and lingered. Tariffs isolate economies of countries and encourage geopolitical instability. Tariffs are unwise in the extreme.
The S&P 500 declined 1.4 percent to end at 2,677.67 — erasing its year-to-date gains — with industrials as the worst-performing sector. It also briefly broke below its 100-day moving average, a key technical level. The Nasdaq composite fell 1.3 percent to 7,180.56 and dipped below its 50-day moving average.
The U.S. will set tariffs of 25 percent for steel and 10 percent for aluminum, the president said. It is unclear whether they will apply to all imports or only metals from certain countries.
“That could really spook the market,” said Marc Chaikin, CEO of Chaikin Analytics. “The biggest wildcard would be a trade war and nobody should be excited for that.” Chaikin also noted some of the pressure seen in stocks is in response to the news on tariffs.
Today was a banner day for Trump. Gun control and tariffs. Great.