Wall Street Blew It

After Thursday’s stock-market sell-off provoked by Donald Trump’s announcement that the United States would be imposing new tariffs on almost every country in the world, the one thing we can say for sure is that Wall Street blew it. In the three trading days leading up to Trump’s much-anticipated “Liberation Day” speech, the market rose steadily as investors apparently convinced themselves that Trump would not do anything too crazy. Surely moderation would prevail.

It did not, much to the chagrin of the stock market and anyone with a 401(k). Trump’s protectionist scheme—which he’s applied unilaterally through a dubious invocation of emergency economic powers—is unprecedented in modern times. It inflicts crushingly high tariffs not only on an obvious target such as China, America’s emerging strategic rival, but also on such countries as Vietnam (which makes much of the clothing and shoes that Americans wear) and Ban...
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