US Stocks Down 4% on Tariff Fears; Trump: "Sometimes You Have to Take Medicine to Fix Something"

Wall Street is panicking. They like stability and predictability, and also, they like the world trade system they willed into being and have profited massively from for 50 years.

President Trump defended his trade policies amid a global market slide, saying economic discomfort is necessary to correct decades of bad deals. He denied triggering the stock market plunge, calling the turbulence "medicine" needed to heal the U.S. economy.

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President Donald Trump, returning to Washington on Sunday, addressed the market turmoil gripping global investors. Speaking aboard Air Force One, Trump pushed back against claims that he was intentionally destabilizing the stock market. "I don't want anything to go down," he told reporters. "But sometimes you have to take medicine to fix something."

His remarks came at the tail end of a brutal three-day stretch that saw markets shed trillions in value. By Sunday evening, early trading suggested the U.S. stock market would open more than 4% lower on Monday--potentially capping one of the worst market routs in history. Oil prices fell below $60, the dollar weakened, and even gold--a typical safe-haven--dipped.

The sell-off was fueled by growing investor concern that the Trump administration would not reverse course on its aggressive tariff agenda. Markets had held out hope over the weekend for a sign of easing trade tensions. Instead, the administration sent a clear message: the tariffs are here to stay.

The "tariffs are here to stay" isn't just for purposes of negotiating with countries that rip us off. I think it's also intended to calm the markets -- the markets don't like tariffs, but they like uncertainty even less, and Trump is telling them they can be certain, at least, that the policy they don't like is the policy going forward. So they can make plans based on that certainty.

I do worry about the short- to medium-term disruptions of the tariffs and the not-small possibility that they can tip the weak economy into recession.

On the other hand, I'm not sure we can continue limping along under the present system. As the neocons said of the "stability" of the Middle East before the Iraq invasion, yes, the system is stable, but it's the stability of the lowest depths of the sewer. It's stable because it can't sink any lower.

Sean Davis @seanmdav

Due to the deliberate government policies of the last 50 years, America can't produce its own food, fertilizer, energy, weapons, medicine, vehicles, clothing, or computers. The architects of those policies, as well as those who’ve gotten rich off them, will look you dead in the eye and tell you it's Actually Good to be forced to rely on your enemies for everything you need to survive.

Lee Smith @LeeSmithDC

It's not just the trade regime, it's the political regime that grew out of it. The widening income gap, rising oligarchy, impoverishing middle class -- all underwritten by a deal with the most vicious totalitarian regime of modern times. That's why Trump called it Liberation Day.

On the other hand, upsetting the grubby stability of the Middle East didn't improve things.

Unelected Dictator of Europe Usula von der Leyen says that Europe is ready to agree to zero tariffs in exchange for zero tariffs, but I don't believe her. I believe this is yet another delaying action by the globalists, hoping to give time to Axis Media to coerce Trump into reversing his policy before it goes into full effect.

Also, note that she will only talk about zero tariffs on industrial goods. They're going to continue keeping US agricultural goods out, forever, because they're full-on protectionist at our extent and always have been and always will be.

posted by Ace at 03:52 PM

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