The left is in a frenzy predicting the sky is falling due to the stock market tanking last week, caused by President Donald Trump’s announcement of 10 percent tariffs on almost all imports, including higher tariffs for certain countries and China responding with its own 34 percent tariffs. However, there is nothing unusual about this. The stock market goes up and down, it will not stay down, but will rebound. They sound so silly scaring elderly people into thinking they are going to lose their life savings.
The stock market was similarly very low for much of 2022 and all of 2023 under the Biden administration, but where was the outrage then? It’s completely predictable that many traders would sell off their stock due to uncertainty over the effects of the tariffs. Markets always overreact to events, with investors engaging in panic selling. One finance professional posted on X that market volatility is how Wall Street makes money; without it, there are no profits.
Chad Sartin, a leader in digital finance with 25 years in the precious metals industry, said Trump is deliberately tanking the stock market, calling it “freaking genius.” He said by tanking equities, it forces cash into the U.S. treasuries instead. That in turn makes the Fed slash rates, and lower rates equal cheaper debt for the U.S. to refinance trillions, dropping mortgage rates so owning a home is more affordable. It weakens the dollar so exports take off.
He said the tariffs are forcing companies to build in the U.S. “No one wants to pay the penalty, so they move their operations here.” He said the tariffs are already working, since the cost of eggs is coming down, as farmers in the U.S. are able to sell more produce within the U.S. Since 94 percent of stocks are owned by just 8 percent of Americans, Trump is hitting the wealthiest 1 percent and turning “short term pain for the rich and flipping it into long term gains for everyone else … He's turning every pressure point into a middle class power.”
Sartin noted that investor Warren Buffett — no conservative — said it’s the smartest economic move in 50 years.
One investor posted a savvy analysis Sunday on X about the expectations for Monday when the stock market opens. “Anybody making moves tomorrow isn’t that savvy of an investor, when everybody knows you have to wait out stock market volatility,” he said. “The market was based on a fake economy that was financed with debt. Trump just wants fair treatment on trade, and when we get it the market will rally.”
The markets will stabilize once businesses adapt. After Trump’s 2018 tariffs on steel and aluminum, the S&P 500 dropped, but recovered after a few months as supply chains adjusted and companies found workarounds.
Huge multinational companies hit by the tariffs aren’t going to massively jack up their prices for consumers, because consumers will stop buying their products and switch to American made products. I laid out previously why the tariffs will not increase prices.
The tariffs will result in job growth and revenue increases in sectors like steel, automotive, and farming, offsetting losses in import-heavy industries. The U.S. economy isn’t as reliant on global trade as smaller countries.
The tariffs are already working. Taiwan has announced they will not be reciprocating with their own tariffs. Zimbabwe said they will be suspending their tariffs.
Honda moved production of its Civic hybrid from Mexico to Indiana. General Motors is going to increase production at its truck assembly plant near Fort Wayne, Indiana, and hire temporary workers. Stellantis, which owns Jeep, Ram, Dodge and Chrysler, temporarily halted production at its plants in Windsor, Ontario, and Toluca, Mexico.
Apple announced a $500 billion investment in U.S. operations over the next four years, including a new AI server factory in Texas. Pfizer is considering moving overseas manufacturing to its U.S. plants. Eli Lilly will be investing $27 billion in four new U.S. manufacturing plants.
Progressives who hastily pull their money out on Monday will regret it. Meanwhile, savvy Trump supporters should buy stocks if they tank even lower on Monday — especially Tesla stock. It will be a buyer’s paradise. One clever investor bought a million HealthSouth shares in 2002 in free fall ($25 to 33 cents/share) for $330,000, while the "experts" panicked due to the FBI investigating the CEO. After fines were implemented, the stock rose back up to $25 and the investor made $25 million in three months.
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