Wall Street Breakfast Tariff Day After
Apr 3, 2025
Stock markets tumble following unexpected global tariff announcements. Experts are puzzled by a baffling tariff formula that raises more questions than answers. As fears of a recession grow, analysts weigh in on the potential for a shocking 20% drop in the S&P. The implications for both the U.S. economy and global trade are dissected, highlighting the tumultuous landscape ahead.
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Market Reaction to Tariffs
- Stock markets tumbled after Trump's tariff announcements, with major averages down over 4%.
- Oil prices also dropped over 5% on recessionary fears.
Tariff Calculation Methodology
- The US implemented reciprocal tariffs, calculated as the tariff rate needed to balance bilateral trade deficits.
- This calculation assumes that persistent trade deficits result from tariff and non-tariff barriers.
Increased Recession Odds
- The odds of a U.S. recession in 2024 surged to 54%, the highest since September 2023, according to Calshi.
- Trump's tariffs resulted in a U.S. effective tariff rate not seen since 1909, raising recession risks, Fitch Ratings noted.