‘Trumpcession’ as tariffs wipe out $3.4tn post-election gains and US stocks nosedive | World | News
US stocks have nosedived following President Trump’s announcement that he would reimpose tariffs on Canada and Mexico and withdraw US aid to Ukraine. Donald Trump’s reelection had been cause for celebration in the US economy, with the S&P Index rising by more than 5% in the month following his return to the White House, adding $2.8 trillion to the economy.
The index hit continued to flourish following his inauguration, rising to 6.3% above election day levels in mid-February – roughly $3.4 trillion. But following a turbulent week which saw the geo-political landscape flipped on its head and culminated in the introduction of tariffs, those gains have now been reversed after half an hour’s trading. Kyle Rodda, senior financial market analyst at Capital.com said: “Wall Street tumbled off the back of the news, while the US Dollar declined as market participants began to contemplate the risks of a US recession.”
A CBS poll published on Sunday showed that 49% of Americans disapprove of the president’s handling of the economy, with talk of a Trumpcession growing in recent days.
Stephen Innes, managing partner at SPI Asset Management, says talk of a ‘self-inflicted “Trumpcession.”’ is on the rise.
According to the Federal Reserve Bank of Atlanta, the US economy could be shrinking at its fastest rate since the Covid pandemic.
The model predicts that the country’s Gross Domestic Product (GDP) could fall by 2.8% in the first quarter of this year, in stark contrast to its prediction a month ago that suggested growth of 4%.
Dennis Debusschere, founder of 22V Research said: “Tariffs increase the odds of a negative feedback loop in the economy. Nobody believed they would be implemented.”
Trump had threatened tariffs on a range of countries throughout the election campaign, famously telling audiences that “tariff” was his favourite word in the English dictionary.
Last month, his decision to impose tariffs on Canada and Mexico saw a short tumble in the US markets before Trump granted both nations a month’s pause to allow them to address areas of concern.
Earlier today Chancellor Rachel Reeves warned that the UK would be hurt by tariffs imposed on members of the G7, even if not hit directly by the US administration.
She said: “I’ve always been really clear that I believe strongly that free trade is good for exporters and importers for both countries on the sides of a trade deal.
“So I don’t want to see tariffs increased. I don’t think it serves anyone well”.
