The Reporter Notebook: Tariffs vs. the Stock Market

Fortune

President Donald Trump's tariffs have some people worried about an upcoming recession.

Transcript

00:00If I could come up with one word, it would be tariffs.

00:03Markets are not too happy with Trump tariffs right now.

00:06They're pretty worried about what could be coming down the pipe

00:09when it comes to reciprocal tariffs

00:11that could be announced on April 2nd.

00:13And the biggest thing is that markets simply don't know

00:16what's going to happen and investors don't like that at all.

00:19The famous saying is markets hate uncertainty

00:21and uncertainty is what's sort of dominating right now.

00:24Until we get clarity around what's going to happen

00:27with tariffs and the rest of Donald Trump's economic agenda,

00:30definitely this sort of volatility

00:32is to be expected going forward.

00:34While they might expect growth to slow

00:36compared to previous years,

00:38sources I've talked to and several analysts on Wall Street

00:41aren't necessarily thinking the market

00:43will enter a recession this year.

00:44The investors, the portfolio managers,

00:46the analysts I've talked to aren't necessarily panicking.

00:49They think that this sell-off could reverse

00:51in the near future,

00:52but there's definitely still a lot of uncertainty

00:54and that's what, as the saying goes,

00:56that's what markets hate the most.

00:58When it comes to very targeted tariffs on China,

01:02like during Trump's first term,

01:03that's not necessarily a surprise,

01:06but when it comes to blanket 25% tariffs on all goods

01:10from, say, Mexico and Canada,

01:12that would be something that would deeply disrupt

01:14sort of interconnected supply chains.

01:17There seems to be some level of consensus

01:19on what certain things that tariffs could lead to.

01:21One, you're almost certain to see higher consumer prices

01:25and so that decreases the purchasing power

01:28of the consumer,

01:29whether you're going to the grocery store

01:30or somewhere else,

01:31you're probably buying a little less.

01:32As firms are looking to deploy capital

01:36and make investments,

01:37invest in infrastructure, things like that,

01:39they're not gonna do so until they really know

01:40what the picture's gonna look like.

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