Trump’s Confusing Tariff Policy Wipes Out Trillions in Gains

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This past week has been filled with dramatic policy shifts from the White House, making it challenging to trust any official statements. A glaring instance of this inconsistency was President Donald Trump’s fluctuating stance on tariffs with Canada and Mexico, which rapidly changed from firmly in place to largely dismissed and then back to a vague possibility. Amidst this chaos, the President took pride in Elon Musk’s capacity to dismiss thousands of government employees during a congressional address that was filled with misleading claims. Just two days later, following an urgent Cabinet meeting, Trump revealed some new limitations on Musk’s authority.

Yet, even in a week marked by such bewildering events in Washington, one comment from Trump stands out for its sheer incredibility. “I’m not even looking at the market,” he stated on Thursday, a claim that left even his supporters struggling to respond.

A senior aide within Republican leadership perhaps captured D.C.’s collective reaction best when he sent me an eye-roll emoji via an encrypted messaging app. Another Republican who previously served in Trump’s administration suggested that we had entered a different reality: “We are on Earth 10,000.”

This is a President who, throughout his initial term, frequently used Wall Street as a measure of both the economy’s vitality and his overall effectiveness as a leader. “That significant Stock Market increase is my achievement,” Trump proclaimed in what was then known as a tweet back in 2019. “If Hillary had won – we’d be facing a major crash!”

So, despite Trump’s assertions on Thursday regarding the effects of his perplexing tariff strategies, this administration fundamentally relies on market performance—its fortunes rise and fall with it, and currently, that indicator is trending downward.

Friday’s job report was anticipated to aid Wall Street’s recovery after the market’s gains since Trump’s election in November swiftly dissipated. Since peaking on December 16, the tech-heavy Nasdaq has plummeted 10% from its high—one that Trump once celebrated. The broader Dow is down over 5%. A frantic selloff among investors has put the markets on track for their worst week since September. As one political advisor to the financial services sector, attending a conference of credit union executives, expressed in frustration: “We’re exhausted, and it’s still Q1.”

The news from Friday’s job report was mixed. The U.S. economy added 151,000 jobs, but the unemployment rate rose to 4.1%. While the numbers slightly missed expectations, the real concern lies in what wasn’t included: the wave of mass layoffs and federal downsizing that hasn’t yet appeared in the statistics. Moreover, the report wasn’t robust enough to offset the ongoing tariff upheaval, which is draining confidence that current investments will yield future returns.

It might not be particularly clever, but it certainly rings true: the so-called “Trump Bump” that followed his return to power has now transformed into a “Trump Slump.” A staggering $3 trillion in wealth accrued since Election Day vanished just this past week.

The duration of this slump remains uncertain. Friday’s job report merely adds another brick to the structure of Trump’s economic legacy during his second term. Whether it’s a dismal basement or a gleaming skyscraper is still up for debate.

However, investors are growing weary of the unpredictability surrounding Trump’s team, where no one seems reliable regarding policy pronouncements. Billionaire Commerce Secretary Howard Lutnick claimed on a business broadcast that the tariffs were here to stay, only to face embarrassment days later as Trump suggested they would be postponed. Then, on Friday, Trump revived the tariffs and threatened a staggering 250% duty on Canadian dairy and timber.

Much of this market volatility is rooted in Trump’s erratic behavior and the influence of individuals like Musk. Consequently, many contractors find themselves constantly refreshing Musk’s DOGE account, anxiously awaiting payment for work that has already been approved and completed.

Importantly, while Washington may be slowly acclimating to the unpredictable nature of many decisions coming from the White House, Wall Street is decidedly not on board. It has become a crisis that unfolds by the hour; decisions that affect the market can shift between phone calls, only to be reversed shortly thereafter. Moreover, we have yet to see an official jobs report that reflects the ongoing cuts across federal agencies, or how the potential decline in services, such as food safety inspections or weather forecasting, could ripple through the U.S. and global economies. We find ourselves on this rollercoaster, witnessing the departure of those who maintain its smooth operation.