Trump’s tariff tweets tank markets, and maybe the economy – Washington Examiner

No sooner had President Trump helped reinvigorate a badly listing stock market by finally talking nice about trade with China than he utterly ruined it by pronouncing himself “Tariff Man” in an astonishingly wrongheaded tweet.

The Dow Jones Industrial Average closed down 800 points (3.1 percent) for the day, almost entirely in response to Trump brandishing his trade-warrior regalia by saying that trade amounts to foreigners “raid[ing] the great wealth of our Nation.”

Just this morning, a Washington Examiner editorial noted that the markets had responded tremendously well to reports over the weekend of a trade truce between the U.S. and China. My editors perceptively warned that “if Trump’s tariffs stand for long, or if this truce collapses and a trade war with China proceeds, the economy will suffer serious damage.”

Sure enough, Trump sent a message interpreted as a threat of continued trade warfare.

Immediately, the stock market tanked. This is par for the course for the last two months. Due to a number of factors, all major stock indexes suffered a horrid month of October and a wildly erratic November — but the worst downturns, even before the October swoon, repeatedly followed indicators, often from Trump himself, that trade tensions were growing rather than easing. Conversely, every single hint of a trade truce has produced a mini-rally.

Trump’s statements and policies have been roiling the markets for many months, and some of us have been warning since the beginning of the year that October would see the economy start to buckle in ways that in subsequent months could lead to an actual recession. As of the moment I write this, the Dow Jones Industrial Average is down 6.6 percent since Oct. 3, and the NASDAQ index is down a scary 10.9 percent.

If this president were capable of learning from actual evidence that contradicts his mystical belief in the (mythical) benefits of trade wars, he would by now have learned that investors and economists alike overwhelmingly detest tariffs and other trade restrictions, and that the broader economy slows down as import taxes restrict supply, raise prices, and deter innovation.

Trump is playing a dangerous game, with harm happening in the real economy because of it. He should bury his Tariff Man persona — forever.