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President Trump announced new import tariffs covering more than 150 countries. The percentages ranged from 10% for quite a few countries including the UK, up to 49% for Cambodia. China received an additional 34% tariff rate above existing ones, while the EU was hit with a 20% rate.
President Trump touted Wednesday as a landmark moment in U.S history, saying his onslaught of tariffs against much of the world would “Make America Wealthy Again.” Instead, the announcement of the steepest levies seen in over a century sparked one of the biggest stock market sell-offs ever – wiping out a total of $6.6 trillion off the global equity markets in two days. That figure brings the total market capitalization lost since Trump’s Inauguration in January to over $11.1 trillion, so far this year.
But, here’s where things really start to get interesting.
Global trading volumes hit an all-time record $26.4 billion on Friday as savvy traders rushed to capitalize on the lucrative opportunity to “short everything” and buy back at massive discount.
Wealth creation opportunities of this magnitude are truly rare and do not come around very often. According to data compiled by GSC Commodity Intelligence – “Stock market crashes of the scale seen in the aftermath of Trump’s Liberation Day have only happened four times in history”.
The first three occasions were the 1987 Stock Market Crash, the 2008 Global Financial Crisis and more recently the Pandemic in 2020. On each and every one of these occasions – the Federal Reserve immediately swooped in and slashed interest rates.
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