Even if the courses on Wall Street develop more positively again: Trump’s chaotic customs policy has spoiled the initial party mood after his election. Instead, disillusionment spreads.
On December 12, 2024, a dream came true for Donald Trump. He, who always had to fight for recognition in his hometown of New York, was allowed to ring the opening bell on Wall Street. Shortly before, the time magazine had named him the “person of the year”.
The Börsians celebrated Trump, also because they promised further tax cuts and deregulation from him. Trump called the applauding stock marketers, America has only been at the beginning of a great time: “Since my choice, the stock exchange courses have risen by three trillion dollars. Three trillion dollars since November 5th – that’s pretty good.”
Because of party mood
Three months later, there is anything but the expected party mood on Wall Street. Instead of lower taxes and deregulation, Trump speaks of import duties almost daily, announces her, partially takes it back, doubles it, and then doubles it again.
“Yes, there is already a certain disillusionment,” Benjamin Dietrich summarizes the reaction on Wall Street. Dietrich is the head of global bonds at Lazard in New York, one of the largest investment banks worldwide. “If there is a poison for the markets, it is uncertainty. We all live from the fact that we try to calculate as much as possible in a very volatile environment.”
Stock indices temporarily in the basement
“But how should you plan if the starting position changes almost every day?” Asks Anirvan Banerji. As head of the economic research institute Economic Cycle Research Institute in New York, he analyzes developments on Wall Street. His conclusion: “It is the chaos about Trump’s customs policy that the decision -makers are currently unsettling.”
The consequence: Since Trump’s office took office on January 20, the most important stock indices on Wall Street went into the basement. The Dow Jones had lost six percent by the beginning of the week, the broader S&P 500 seven percent and the technology -heavy Nasdaq even ten percent, which Börsians call “market correction”.
“What’s next?”
For financial market expert Julia Coronado from the research institute Macropolicy Perspectives, the downward development is solely on the account of Trump’s chaotic customs policy: “Wall Street can deal with tariffs when they know exactly how high they are. But at the moment, the companies like deer are in the highlight and wondering ‘What is next?'”
This contradicts one of the best known, but also the most dazzling stockbrokers who have ever worked on Wall Street: Jordan Belfort, whose memoirs were filmed in “The Wolf of Wall Street”. Belfort speaks of a normal market correction in the Sender Fox News and defends Trump’s tariffs: “The tariffs will only hurt a bit. The foreign companies will catch the additional costs and reduce their prices for the US market.”
Trump 2 is not Trump 1
Just as it happened in Trump’s first term, emphasizes Jordan Belfort. At that time, Trump’s punitive tariffs hardly had an impact on consumer prices because foreign companies covered the additional costs for tariffs to remain competitive in the United States.
But Trump 2 is not comparable to Trump 1, says investment banker Dietrich. Trump no longer only uses the tariffs as a negotiating instrument, but this time out of conviction to bring back industrial jobs: “You could actually say a bit provocative that Trump is now heading to the workers’ party.” The Republicans are again the party who focuses on the “little man”.
What if inflation attracts again?
Donald Trump even does not want to rule out a temporary recession. For him, the primary goal is to bring industrial jobs back to the USA and reduce the huge trade deficit with the additional revenue with tariffs.
However, if consumer prices in the United States rise due to Trump’s tariffs, the inflation rate could go up again, so that the US Federal Reserve would have to counteract with higher key interest rates. Nobody wants to speak of such a worst-case scenario at the Wall Street.
