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A month before the 2024 elections, Elon Musk tweeted: “Trump now led Kamala in 3% in betting markets. More precise than surveys, since real money is at stake.”
These markets were correct. Musk evaluation of these markets is also correct. When people bet their own money, they do it with the greatest amount of solid information and the possible rational forecast.
This fact is a great reason why President Donald Trump should reverse his tariff policy. Financial markets are driven by people who invest their own money in advance of future economic conditions, and these markets shout that the president’s tariffs will inflict Hogdo damage to the United States economy.
President Donald Trump spokes a duration of a cabinet meeting at the White House on April 10, 2025, one day after announcing a 90 -day break on “reciprocal” rates, with the exception of China. (Anna MoneyMaker/Getty images)
From the time of the April 2 launch of Trump of its “Day of Liberation” tariffs until its announcement on April 9 of a 90 -day pause in most of these duties, the Dow Jones Industrial Avenge showed 11% of its value. The S&P 500 fell by 12% and Nasdaq by 13%. These massive decreases occurred in just six days. Then, when investors learned of their rate pause, the mass sale stopped. Much, it was thought that not all, or thesis losses were recovered.
10 hard Trump tariff questions critics do not want to answer
If the tariffs were really likely to restructure the United States economy in a way that, as Trump promises, “it will make us very rich and very strong,” the announcement of the rate would immediately have had Wall Street with bulls immediately. The short -term economic interruptions caused by tariffs would have ignored it. Focused on the brilliant future, the bulls would have immediately conducted the prices of upward shares.
But instead, the financial markets collapsed how they were mutilated by Por, revealing that people who know and spend their own money anticipated that the economic damage of these rates earned to be temporary. It will be durable.
Then, the Bulls appeared in force as soon as the president announced his 90 -day break. There is no better evidence that investors with their eyes in the future are convinced that thesis tariffs are economically destructive.
And why wouldn’t they be destructive?
The right begins to sound like the left in the rates: that is not America first
In increasing the prices of consumer goods, tariffs reduce the purchasing power of families.
By protecting competition producers, companies become less business and innovative. The dynamism of the economy decreases.
In addition, because 61% of American imports are raw materials and intermediate goods used as supplies by producers in the United States, tariffs increase the production costs of US companies. Covering the highest costs by increasing the prices of their results, these companies not only sell less at home, their exports become less competitive worldwide. As companies sell and export less, they fire workers.
And several foreign governments retaliate by raising their own rates. This retaliation further reduces the US export market.
Unfortunately, the economic butcher shop of tariffs does not end there. By cushioning the competitiveness and dynamism of the US economy, tariffs incite global investors to retire from the United States
I own a Corvette concessionaire and I have already seen the benefit of Trump’s rates
The global investment brings capital to our coasts and reduces our interest rates. Much of this capital finances the opening of new businesses, the expansion and improvement of existing businesses, and research and development, as well as the training of workers.
These investments raise the US GDP more importantly, increase the productivity of US workers. And the increase in workers’ productivity is completely necessary to increase real wages and living standards of Americans continue to improve.
And thus, tariffs produced global investors to flee from the USA. The income of the Americans will shrink.
This withdrawal of global investors from America will achieve, ironic, one of Trump’s main objectives: smaller commercial deficits in the United States. The president believes that thesis deficits are evidence that other countries are cheating on the United States and cheating us.
The nets go to the complete negative spider on the tariff turbulence, stay away from the good economic news
But the president is fog. The United States directs commercial deficits because, just as you cannot spend all your dollars on consumer goods if you want to invest, foreigners cannot spend all their dollars on US exports if you want to invest in the United States.
The dollars that foreigners do not spend in US exports increase US trade deficits. But those same dollars are invested in the United States, which makes the United States execute a capital account surpluses – That is, a net investment entry to our coasts.
Because nobody invests in places that are believed to be in economic deterioration, the action of American commercial deficit of half a century shows that investors worldwide have immense confidence in the economy of the United States. We should intimidate having a globally attractive economy. We should be proud.
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And just as a company grows by attracting more investment, the United States economy also increases by attracting more investment.
Far from the commercial deficits of the United States that indicate that Americans are scammed, these investment tickets are the contributions of foreigners to the health and growth of the United States economy. The president’s rates, unfortunately, will promote foreigners to make their contributions elsewhere.
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