Update: Annnnnd It’s Gone! Didn’t even last a day, folks. As long as this criminal administration remains in power, the economy is all downhill from here.
Updated headline 1: Live updates: US stocks give up an early gain as clock ticks down to Trump’s new tariffs
Original headline: US stocks rise as global financial markets show signs of relief
Original post body: Huge shout-out to AP News for providing context and saying the loud parts, even if quietly.
Today’s sudden market rise follows a historic pattern: Some of the best days in the market’s history have been clustered around some of its worst days. The biggest gain for the S&P 500 since World War II was an 11.6% surge on Oct. 13, 2008, for example. That was during the depths of the Great Recession.
Emphasis mine.
It’s also worth noting that even the administration’s own formula assumes a tariff pass through rate of 25%. Obviously this is much, much lower than the 95% Cavallo calculates, but even taking the administration’s numbers as being accurate, they’re still saying that prices will rise by 25% of the tariff rate.
The average weighted global tariff across all affected goods is now 40%. By Cavallo’s numbers that means a 38% average increase in the price of all imported goods. But even by the administration’s incredibly sunny numbers, they’re still saying that all prices on imported goods will rise by at least an average of 10%. That’s, effectively, a new 10% tax on most of what you buy.
(Also, because of how much of what the US buys comes from China, that 40% weighted average will go higher if Trump applies additional tariffs on China, as they apparently intend to, to the order of over 100%)
Great points! And these price increases aren’t just important for the consumers. Profit margins are thin enough as it is. Entire businesses will close because they simply can’t afford to continue operating.
A sudden 10-100% increase in cost of materials will cripple the very industries these tariffs are supposed to “protect”!