Bulwark Takes - Trump Crashes Stock Market With Tariff Announcement

Episode Date: March 3, 2025

Tim Miller and Jonathan V. Last talk the stock market tanking in real time as Donald Trump announces tariffs on Mexico and Canada, with both Nasdaq and Dow Jones tumbling significantly by end of day.

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with my buddy JVL. Right, we had to pop on here. The stock market closed nine minutes ago. A massive, massive drop of 650 points in the Dow. It's about 1.5%. About 500 points in the Nasdaq. It's about 2.5%. Nasdaq now down 4% on the year. This comes on the heels of a Trump press conference where he said that the tariffs, the 25% tariffs on Mexico and Canada that are pinned to fentanyl, I guess, are going to go, are going to affect tonight at midnight. And then an additional 10% on China also going to go into effect. JVL, you wrote about a month ago about the stock market's reaction to Trump and what to expect if the tariffs went into effect.

What's your assessment here of today's reacts? You know, it's not good for Trump. I mean, it's good for us in that it suggests that there might be some rationality to the stock market. Us being society. And it's not good for people's retirement accounts not good for people's retirement well but but i do mean that's good for us as a society because it means that there is some actual linkage between like things happening in the world and the financial markets and because what had been happening previously is that trump was doing all this

batshit insane stuff and the stock market was just do-do-do-do-do, as if there was nothing happening in the world. So you mean it's a good thing for society in the sense that it's a sign that there are still laws of gravity? Right. There are linkages between the real world and what the financial world sees. Okay. Right.

And that's bad. It's bad when those linkages get broken, because that's when you get's bad when those linkages get broken because that's when you get things like bubbles, right? It's when linkages between reality and finance are broken, very bad things happen. Eventually, it's just the first some people get really, really rich. Well, to put some evidence, one on one side of the ledger, one on the other side of the ledger about whether there's a linkage to reality and the stock market in particularly the MAGA media world. I want to play this pretty amusing ticker of Trump talking about, because just for context, many people, most people I'd even say,

not me, but most people thought that these tariffs were never going to happen. Right? Like I had a little egg in my face. Me and Sam Stein did one of these videos a month ago because they said, I was like, the tariffs are going to go into effect and he's going to keep them. He's obsessed with tariffs. You should just listen to him. He's too. And it would be humiliating for him to not do it. Sam was on the side of like, well, you know, he's a bluffer. He's a bluffer and he is a bluffer. And so a lot of people, I think, thought he was going to bluff forever. And here we are today. And he's not bluffing. It's going into effect. And you can watch in real time the stock market drop as he's speaking. And let's just watch that on Fox News to give ourselves a little joy. I'm a huge fan of

Ronald Reagan, but he was bad on trade, very bad on trade. He allowed a lot of people, a lot of business to be taken. So I say that with due respect because he was so great on other things, but he was bad on trade. We are setting records right now, records like nobody has ever seen before. I mean, I'm not happy to lose money, but yeah. You know, Donald Trump doesn't want peace. Otherwise, he wouldn't be out here with these tariffs. I don't understand it.

On the other side of the reality coin, so to speak, another little bit here on Fox Business. There's Larry Kudlow, Trump's great economic advisor from the first term. Really rational guy. Really believed in free markets and free people and traditional conservative economics. Principled guy, and then got on board with Trumpism and tries to kind of backfill everything as being good for Trump, but also free market. Here he is today.

JBL, before I play, do you want to guess what his take was on the stock market side, Larry Kudlow? It's orchestrated by woke people who are paid by woke crisis actors trying to embarrass the president. Not not so far off. OK, let's listen. The Biden economy, what's left of it looks like it's tanking. Tax cuts and deregulation from President Trump are so important. I sure hope we hear lots about it in the State of the Union message tomorrow. Meanwhile, the stock market down almost 700 points. The Biden economy, what's left of it, is tanking.

It's still the Biden economy. The stock market went up, up, up, up, up the entire time during Biden's presidency. Yeah, the economy was very good during Biden. Stock market, stock market go up up up up up the entire time during biden yeah the economy was very good during biden stock market stock market go up during and uh no uh he claims to blame this on um on biden well i mean what what so what do you think as far as i i get you had written out a column that kind of laid out the different um options and i forget, I don't have it pulled up. So I forget what your assessment was for how much the stock market would have to go down for people to really feel like we've reached a level of seriousness here. What's your sense for that? Yeah. I mean, the numbers I looked at was like 3.5%. So 3.5% of either the S&P or the Dow or the NASDAQ

would be a line over which we are going from, oh, this could be bad to, ah, ah, you know, white knuckle moment. Because the two big corrections we've had recently were COVID, when people realized that COVID was going to have a serious impact, and the 2008 financial crisis after Lehman went out. And so in both of those cases, I'm forgetting off the top of my head, but it was, I think, three and a half to five percent were some of the big initial drops where, you know, like all of a sudden people are lurching and catching themselves to try to understand what the new world looked like. And I, I wonder if, you know, you say he's actually going to do it. He hasn't done it yet.

He says midnight. This is true, right? Like maybe, maybe we get another last minute stay from governor Trudeau or something. Although I, I gotta say, if you're a politician in Canada, from everything I can tell, that place is feeling more nationalistic fervor than ever before. And I get the sense that those people are happy to pay a little bit extra for whatever goods they have to pay extra for because they would love to stick it to fatty trump and uh i don't know like if you're a politician up in canada could you possibly lose by saying by getting super macho and just calling trump's bluff on this i don't think so well i think that

um i i think that the reason that they're not doing that is because Canada just is economically tied to us to a great deal and to a greater percentage just by nature of size. So I think that there's going to be real economic consequences for Canada. You're right. If he goes through with this. Sure, there will be. But also, it is one thing to have economic consequences imposed upon you by a bad guy. Those become easier to stomach. Not stomach, but you know what I'm saying?

Easier to endure because you have somebody to hate. You have somebody who's responsible for it. Unlike in America where if we get this, if you're in the Midwest, you know, the cost, the prices where they get all their lumber for construction and all of their gas from oil from like, I don't know, the ability for the Canadians to make life impossible for every Republican in the industrialized Midwest and to really target Trump friendly people and Trump friendly businesses, uh, they can impose a great deal of pain. And the difference is that in America, nobody was looking for this and nobody thought that this was coming their way. And so it'll be surprise. Right. And I just think in terms of the relative,

the psychology of this, who feels it more, I think it'll be America that feels it more. Just because of life, everything's about expectations in life, maybe. Yeah. Yeah. And who to blame then, right? And the person to blame will be Trump.

Right. You have to blame Canada on this. On top of that. Blame Canada. Blame Canada. I do love that song. On top of that, you know, the farmer, you mentioned the Midwest,

farmers are going to feel this. Trump sends out a bleat today that's insane. It's like, don't worry, farmers. We're going to sell a lot more soybeans to Americans. We're going to tear up all these foreign agriculture products, and so you're going to be able to sell right here in America. It's like, farmers? To who?

Hey, to who? But also, I guess to the people that were getting products from overseas is his theory if you want to even like try to explain it but but i don't you know i'm not a farmer but i'm in a farm family all right um my husband's family as i did some farming farmers fucking like plan out like seasons in advance. You know, it's not like, you know what I mean? Like the whole global trade system now of like, oh, we're doing X bushels of this and it's going to go overseas. Like the idea that just, oh, tomorrow, don't be like, boom.

And you can say, oh, I have new clientele in Wyoming. You know, it's like that's it's ludicrous is there uh an underdeveloped soybean market in america where the truth is you know really if they'd only been allowed to sell soybeans to other americans then you know they would have really been no the whole thing is preposterous i suspect what will happen though is trump will go around bailing out the constituencies that he views as important to him. And so he'll buy them off. And again, he did this the last time.

Specifically with Soviet farmers. That's one of my favorite stats. The buyouts to the farmers from the tariffs last time cost more than I believe the entire State Department budget. Yeah. Like that's how much we spent buying out farmers. And you have this coupled with the end of USAID, which, again, bought a lot of this stuff from American farmers and shipped it overseas. And so now all that demand is just disappearing and going up overnight. You have this is I mean, you talked about this with with Murphy, I think, on the flagship pod about how what you have here is a guy who is doing inflationary stuff. Tariffs are inflationary. He is looking to slow GDP growth down, which is check, check.

That's happening. He is doing some version of austerity within the government by cutting government payroll without really cutting government spending, which is going to have, again, all sorts of downstream effects as you just wind up with big numbers of people entering the labor pool all of a sudden without jobs. This is playing with fire, and this is asking for a recession. And here I'll ask you something, Tim. Does Donald Trump look to you like a guy who's governing in such a manner that he cares about public opinion or future elections?

No, he doesn't. And that is alarming. It's hard for me to transition into you alluding to the end of democracy into a couple other tariff facts, but I do have a couple other things I want to hit. So we're just going to do a hard transfer, hard right turn. Everyone can just sit with what JVL was implying there. And you can just think about that as you go to sleep tonight.

In the meantime, just Joey, Joseph Politano, who's a good economics guy follow. He points this out. Even if Trump backs, even if he wusses out again tonight and backs off on the Canada and Mexico tariffs and they don't go in. Now, a 20% tariff on all Chinese imports would be larger in terms of raw economic impact than all the trade war actions taken out through the entirety of his first term. So just the chinese tariffs have a scale to them themselves and i think obviously there'd be a market bounce back tomorrow if you pull down on on uh on canada and mexico but still there's this long-term effect and that also ties

to another point uh somebody's making here which is that the stock market is the short-term pain like the acute thing but then even if that levels out it-term pain, like the acute thing. But then even if that levels out, it's like the costs, like the prices and the impacts on regular people, like all of that is going to come down the pike in the future. So it's just a massive shit sandwich all around. Well, if you want to go back to being dark and – so if we wind up something recessionary, but we also have inflation, which is what it looks like. It looks like we're headed for stagflation again. One of the things Trump will want to do is pressure the Fed into cutting rates. Right.

And the Fed has already said that they don't want to do this. So we could then wind up with a crisis where Trump is trying to replace the head of the Federal Reserve, the head of schedule. Great. Boy. So there you go.

Take your schadenfreude while you can get it. Check your 401k or don't today. And let me tell you, Donald Trump making stonks go down. We'll leave it there and keep you posted. Subscribe to the feed. See you soon. Stonks down.