TJ Walker breaks down Trump's 100% tariff threat on Chinese imports and its immediate market fallout: the S&P 500 dropped 2.7%, Nvidia fell 5%, and oil dipped below $59. He warns the move mirrors Smoot-Hawley and risks inflation, supply-chain chaos for AI chips and EV batteries, and broader economic damage.
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According to the Times, Wall Street Journal had its worst day in six months after President Trump threatened to slap 100% tariffs on all Chinese imports starting November 1st. The S&P 500 fell, as I mentioned, 2.7%. The Nasdaq tumbled. Oil prices dropped below $59 a barrel, their lowest level since May. The sell off followed Chinese decision to restrict EXP exports of rare earth metals, vital for AI chips and EV batteries. Trump claimed he was blindsided, posting that he was, quote, calculating a massive increase of tariffs on Chinese goods and warning of further countermeasures. Yesterday, he doubled down, accusing US Regulators of being too soft on Beijing and vowing to go harder. His comments rattled investors and they fear a full blown trade war. One expert told the Times. This is a stark reminder that the fragility in China US relations is deepening. Okay, what's the real message here? For the last six months, seven months, Wall street has been sort of in this denial phase. This Trump tariff stuff, maybe it's not really happening. Maybe it doesn't matter. AI booming. Well, it does matter. Trump's tariffs are absolute insanity. It could destroy the economy. It could destroy the entire stock market. This is serious stuff. It's chaos. Let's dig a little bit deeper here. These are historic highs. These are higher tariffs than what happened in 1930 with the Smoot Hawley era taxes. And that is according to most economists, not all most economists. One of the principal reasons why we had a Great Depression. And as fun as it is to talk about Sleepy Joe and how old Joe Biden was, the economy was in great shape. January 20th this year when Biden gave the keys to the economy to Trump. The economy was in great shape. Yeah, inflation was a little higher than people would have liked. Unemployment low, market high. Things were going well. And until this insanity of inflation, of tariffs everywhere, which is really a tax on you, it's slowing things down. The best thing that ever happened to this administration, frankly, is this AI boom. So much money is being pushed into AI that is kind of wallpapering over all this nasty stuff, all this bizarre stuff with tariffs. If, according to many economists, and I concur, if it weren't for AI, we, we would be in a recession right now if it weren't for this massive euphoria, this once in a generation new technology. There's so much euphoria and people are putting so much money into it, our economy would have certainly stalled when the first gigantic rounds of these tariffs went into play. Let's look at some more facts. Trump's 100% tariff plan would be the most aggressive move by any US President in a century. Stocks, as I mentioned, plunged. It's triggered in part by China's rare earth export curves. You know, these rare earth minerals are not really rare, but they are extremely important and China's got them. And they don't have to be bullied by us. China rightfully so, saying, we don't have to take this. They've already shown what they can do for the soybeans. We can buy soybeans elsewhere. Meanwhile, we have all tons of soybean farmers in the upper Midwest. In America, their economies are destroyed, their businesses are destroyed. All because of the madness of Trump thinking he can be the king and impose his will on the rest of the world. The rest of the world has a message for Donald Trump. It's basically this. We don't have to take your nonsense. That is the message China is sending, like it or not. Tech giants Nvidia went down 5%. AMD went down 8%. China says Washington provoked this through the technology bans. US farmers are bracing for even further devastation to their markets. A lot of potential for inflation and AI chip disruptions. The planned Trump Xi summit now not looking so good. And it does appear that there's going to be a new trade war. Now, some of you are thinking, didn't I hear all this about six months ago? Yeah. And then people kind of forgot about it because Trump is doing so many other mad things, like launching a war with US soldiers on US soil, attempting to take over countries, Panama, Greenland, arresting anybody who criticizes him, like James Comey. There's so much madness going on that for a while a lot of us thought, well, we can just kind of not think about the economy. Let's just let it come along. Because there's so much other crazy stuff over here. Well, there is a lot of crazy stuff going on everywhere. It doesn't mean our economy should be continuing to grow and grow and grow. I mean, as of Thursday, most indexes were at all time highs. Is it possible that it was overinflated? The stock market, when you look at historical PE ratio ratios, yeah, but it didn't need this, this idea at a time when the world is more interconnected than ever, that we're just going to put up these walls. It's one thing to say, I don't want illegal immigrants coming to my country, but when you're talking about business people playing by the rules, fairly observing contracts, obeying international law and kicking them in the teeth, they're going to be severe repercussions.
