S&P 500: A Horrible $8 Trillion Trade

(11min)

Summary

  • President Trump's tariffs have led to an $8 trillion market cap loss in the S&P 500, far outweighing the $1.2 trillion trade deficit.
  • Higher tariffs act as a sales tax on consumers, increasing living costs, potentially causing inflation, and risking GDP growth and stock market stability.
  • The US trade deficit in goods reflects economic prosperity and a pivot to higher-paying service jobs, which tariffs threaten by risking high-paying jobs.
  • Lower trade deficits often signal economic downturns; Trump's tariffs may reduce the deficit but at the cost of economic strength and global influence.
  • Looking for a helping hand in the market? Members of The Aerospace Forum get exclusive ideas and guidance to navigate any climate. Learn More »

Recession Global Market Crisis Stock Red Price Drop Arrow Down Chart Fall, Stock Market Exchange Analysis Business And Finance, Inflation Deflation Investment Abstract Red Background 3d rendering

KanawatTH

Stock markets have declined globally following the announcement of “reciprocal tariffs” by President Trump. While the idea of narrowing the trade deficit is understandable, I do believe that the way it is being executed now is highly questionable and feels like losing

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This article was written by

19.29K Followers

Dhierin-Perkash Bechai is an aerospace, defense and airline analyst.

Dhierin runs the investing group The Aerospace Forum, whose goal is to discover investment opportunities in the aerospace, defense and airline industry. With a background in aerospace engineering, he provides analysis of a complex industry with significant growth prospects, and offers context to developments as they occur, describing how they might affect investment theses. His investing ideas are driven by data informed analysis. The investing group also provides direct access to data analytics monitors. Learn more.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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