By: Qamar Bashir
There was a significant plunge on Wall Street on Monday, driven by investor nervousness over the economic impact of President Trump’s trade policies. Stocks in Japan, Australia, South Korea, and China all followed suit, tracking losses from the U.S. Wall Street suffered major declines as fears over the trade war escalated. The S&P 500, which tracks the largest American companies, dropped by 2%, while the Dow Jones slipped just over 2%. The tech-heavy NASDAQ took the hardest hit, plunging by 4%. These losses were sparked by concerns that tariffs would lead to higher prices for consumers and complicate the Federal Reserve’s efforts to control inflation and reduce borrowing costs.
Investor sentiment was further shaken by President Trump’s comments in a Sunday Fox News interview, where he refused to rule out the possibility of a U.S. recession. Instead, he described the economy as being in a “period of transition” and stated that bringing wealth back to America was a significant undertaking that would take time. His remarks failed to reassure investors, triggering an 800-point drop in the Dow, a six-month low for the S&P 500, and steep declines in major tech stocks.
Technology companies, which had been a source of optimism in the stock market, also suffered significant losses. Tesla’s stock dropped by 15%, Nvidia fell by 5%, while Alphabet (Google) and Meta (Facebook) both lost over 4%. These sharp declines indicate growing concerns about the stability of the technology sector amid ongoing trade uncertainties.
Kathleen Brooks, a research director at XTB, noted that President Trump claimed he does not closely monitor the stock market, but he may be paying more attention now after Monday’s dramatic sell-off. He is scheduled to meet with top U.S. CEOs in a business roundtable discussion, which was likely requested by business leaders concerned about the stock market downturn and increasing recession risks.
The situation is expected to become even more volatile as April 2 approaches, the date when the full suite of tariffs is set to be imposed. White House officials have urged the public to remain calm, arguing that the current market fluctuations are based on emotions rather than economic fundamentals. However, Trump’s policies are raising serious concerns about the future of the U.S. economy.
One of the biggest fears is that the U.S. is trying to isolate itself in an increasingly interconnected global economy. Supply chains are deeply globalized, and while America is a powerful economic force, it still relies on international trade and strong global economic conditions. Disrupting these relationships with tariffs could have long-term negative effects.
There are already signs that the U.S. economy was naturally slowing down after years of growth. Now, the added pressure from tariffs and trade disruptions is amplifying recession fears.
Trump’s aggressive economic approach includes not only broad-based tariffs but also efforts to cut government spending. However, government spending has played a significant role in driving economic growth in recent years. Reducing its role while simultaneously implementing tariffs may be an overly aggressive strategy that could push the economy into a downturn.
Trump’s tariff policy includes China and Canada, which could significantly impact the US economy. The stocks that tumbled this week are going to take a second hit once the Chinese tariff takes effect, which includes 15% levies on key U.S. agricultural products such as chicken, wheat, corn, soybeans, pork, beef, and fruit.
China has the advantage in this situation because Americans heavily rely on Chinese goods, while China relies less on U.S. imports. This trade standoff is reminiscent of the first Trump administration, during which U.S. farmers suffered the most. Beijing seems to be taking its time to negotiate, opting to engage from a stance of strength.
But unlike China, Canada has reacted angrily to Trump’s uncalculated tirade of tariffs. The Canadian Prime Minister and Ontario Prime Minister both angrily reacted to Trump and hurled counter and practical threats to Trump while sparing the American people. In their fiery speeches both Canadian leaders said that Canada is though unwillingly and with great regard to the American people who will suffer from Canadian Tarrifs, levied unprecedented 25% surcharge on electricity exports for the 1.5 million American homes and businesses that Ontario powers—homes and businesses in Minnesota, Michigan, and New York. This surcharge will cost families and businesses in these states up to $400,000 every single day. On average, this will add around $100 per month to the bills of hardworking Americans.
They further threatened that they would not hesitate to increase this charge if necessary. If the United States escalates, they will not hesitate to shut the electricity off completely. They reiterated that their number one job is to protect the people of Canada; they would fight like they have never fought before to protect Canada. They took a swipe on Trump and said his unprudent policies are resulting to losses worth trillions in value. Companies are second-guessing investments in the American economy. American workers’ jobs are at risk and the costs for hardworking American families will only go up.
As a result of these tariffs, markets are down, and inflation is set to rise dramatically across the United States. Thousands of American jobs are now at risk, particularly in industries that rely on Canadian materials or consumers. The U.S. government’s actions will increase costs for American families on essential items like groceries, gas, cars, and homes. Additionally, these tariffs threaten American national security by restricting access to critical minerals, energy, building materials, and fertilizers from Canada.
With Anti-American sentiment in Canada is at an all-time high, economists and security experts argue that the move does not make economic or strategic sense, as it weakens the U.S.’s position globally while strengthening adversaries like Russia and China.
Trump’s policies serve as a classic example of how a leader, driven by false assumptions, can make uncalculated sweeping decisions that not only negatively impact key partners but also have lasting consequences for the stability, economy, and security of North America and the rest of the world.
By: Qamar Bashir
Press Secretary to the President (Rtd)
Former Press Minister at Embassy of Pakistan to France
Former MD, SRBC
Macomb, Detroit, Michigan
