President Donald Trump touted new tariffs imposed on Mexico, Canada and China, but said there will be at least some short-term disturbance for Americans.
“Tariffs aren’t just about protecting American jobs, they’re about protecting the soul of our country,” Trump said March 4 in a joint address to Congress. “Tariffs are about making America rich again and making American great again, and it’s happening, and it will happen rather quickly. There’ll be a little disturbance, but we’re OK with that.”
The disturbance has been felt in global equity markets since Trump on March 3 announced that new tariffs would go into effect March 4.
The Dow Jones Industrial Average closed down 670 points, or 1.55%, at 42,521 on March 4, while the S&P 500 fell 1.22% and the Nasdaq Composite dropped 0.35%.
Trump on March 4 levied 25% tariffs on goods imported from Canada and Mexico, with an additional 10% tariff on Canadian energy products. Also, a 10% tariff that Trump slapped on Chinese goods in February was doubled to 20%.
Asset managers predicted that the tariffs would slow economic grow and increase inflation.
“We should all buckle up a bit because markets will be more volatile,” said Harvey Schwartz, CEO of $441-billion Carlyle Group, speaking earlier in the day at the Bloomberg Invest conference in New York on March 4.
Schwartz said that the markets are entering a period of geopolitical economic tension and reacting in a “fairly material way” to tariffs against Canada and Mexico with questions on what the full policy mandate will look like.
Markets like certainty, Schwartz said. “Now we are in a period of uncertainty,” he added.
