Moments after the stock market closed on Wednesday afternoon, President Donald Trump unveiled his long-anticipated tariff plan at a Rose Garden event he dubbed “Liberation Day.” Trump announced that all imports will be subject to a baseline 10% tariff. He also set country-specific reciprocal tariffs on imported products (34% for China, 20% for the European Union, 24% for Japan). Trump peppered his speech with grand predictions of an economic Valhalla.
“Jobs and factories will come roaring back into our country…. This will be, indeed, the golden age of America,” he declared.
Investors have so far not shared his ebullience. Two of the three major market indexes just finished their worst quarter since 2022, when Russia’s Ukraine invasion roiled supply chains and energy markets. The S&P 500 has sunk 4.6% since January, while the technology-heavy Nasdaq has dropped 10%. The declines have obliterated more than $2 trillion in market value. In the hours following the announcement, Dow futures dropped around 1,000 points. The price of gold spiked to an all-time high, showing that investors are craving stability amid the Trump-induced chaos.
For anyone watching their 401(k) shrink, it’s tempting to hope that Trump will dial back his tariffs to avert a market meltdown. During his first term, Trump closely monitored the markets and changed course when his erratic policies triggered widespread sell-offs. “More than a dozen people close to Mr. Trump say he sees the market as a barometer of his success,” The New York Times reported several weeks before Trump was sworn in for his new term. But if Trump 2.0 has proved anything, it’s that he is no longer constrained by such external guardrails.
“He’s not listening to anyone or anything,” a Trump ally who speaks regularly with the president told me this week. During a recent NBC News interview, Trump declared he “couldn’t care less” if people had to pay more for imported cars.
As the market swoons, Wall Street CEOs—a powerful constituency Trump consulted during his first term—have been largely silent about his market-destabilizing policies. “I think the business community understands what the president is trying to do with tariffs,” Goldman Sachs CEO David Solomon diplomatically told Fox Business last month. Indeed, Solomon and JPMorgan chief Jamie Dimon refrained from challenging Trump when he appeared at a question and answer session hosted by the Business Roundtable in March. “They sat there like docile parishioners in a church while Trump pontificated from the pulpit,” said Jeffrey Sonnenfeld, a professor at the Yale School of Management. In an interview with Semafor the day after the event, Dimon was skeptical that tariffs would affect consumer behavior. (Reps for Solomon and Dimon did not immediately respond to requests for comment.)
Meanwhile, MAGA world is lobbying Trump to go after the big banks and private-equity funds, just as he has taken aim at elite law firms and academia. On his War Room podcast on Tuesday, Steve Bannon urged Trump to go after private-equity giant the Carlyle Group. “That needs to be a target. That’s a rat’s nest over there,” Bannon said. “The CEOs are all working hard to stay out of the line of fire,” a GOP strategist who advises business leaders told me.
But one senior private-equity executive said Trump may yet roll back his tariffs if his poll numbers crater. The president has appeared to flirt with gravity on other matters of late. Politico on Wednesday reported that Trump has told his close allies that Elon Musk, whose chain-saw-wielding antics at the Department of Government Efficiency have come to define the early months of Trump 2.0, will soon step back from the Washington stage. The timing of the story was conspicuous given Tuesday night’s Democratic win in a Wisconsin judicial election that saw Musk drop a reported $20 million.
“He’s for instant gratification,” the executive said of Trump’s long-term commitment to tariffs. But then again: “Who the fuck knows? It’s Trump.”
