To misquote the late Republican senator Everett Dirksen: “A billion here, a billion there, and pretty soon you’re talking about serious money.” Yet for the ultra-rich tycoons who lined up to endorse Donald Trump at his January inauguration, the recent financial downturn is more than just a trivial loss.
Elon Musk, Jeff Bezos, Sergey Brin, Mark Zuckerberg, and Bernard Arnault—titans of tech and luxury—have collectively seen their net worths plummet by an eye-watering £160 billion since the day they pledged allegiance to Trump’s presidency. For these billionaires, it is an inconvenience rather than a catastrophe, but for millions of ordinary Americans, the stock market downturn spells financial distress.
Wall Street’s major indices have struggled since Joe Biden handed over power, with the tech-heavy Nasdaq suffering the steepest decline—losing nearly 10% of its value since the start of the year. Monday’s market chaos alone wiped out $1 trillion in stock value, hitting companies such as Tesla, which has dropped almost 40% this year. Meanwhile, the S&P 500 is down by 5%, sending a clear signal that investors are rattled.
This is hardly the “boom like no other” that Trump had promised just weeks ago, when he told an investor conference: “The stock market is going to be great.” Instead, financial analysts are increasingly nervous that Trump’s policies could trigger a full-blown recession.
A sudden shift in tone
In a dramatic shift, Trump has now refused to rule out an economic downturn, despite the fact that the US economy was growing at a solid 2.3% in the final quarter of 2024, just before he took office.
The immediate cause of this turmoil? Trump’s aggressive trade war against America’s biggest trading partners. Throughout his campaign, Trump repeatedly threatened tariffs on foreign imports as part of his ‘America First’ agenda. But investors assumed he would never carry through on those threats with such ferocity and speed.
As Ipek Ozkardeskaya, senior analyst at Swissquote Bank, puts it:
“Stock markets were heavily hit by fears that Trump’s trade and international policies would have a terrible economic and geopolitical fallout in the US and beyond. The recession bets are rising by the day.”
The global trade war escalates
This week, the European Union and the UK became the latest targets of Trump’s economic war, as the White House slapped 25% tariffs on all steel and aluminium imports from the bloc. The EU immediately retaliated, imposing counter-tariffs on £20 billion worth of American exports.
For everyday American consumers, this trade war means higher prices, surging inflation, and economic uncertainty. Tariffs on foreign goods will inevitably drive up costs, putting pressure on small and medium-sized businesses that rely on imported raw materials. Large corporations, too, will suffer as supply chains break down and consumer confidence weakens.
It is a stark contrast to Trump’s previous attitude toward the stock market. During his first presidency, he boasted endlessly about record-breaking highs, tweeting triumphantly:
“Stock market at an all-time high. That doesn’t just happen.”
Now, he seems to have abandoned that rhetoric entirely. In an interview with Fox News this weekend, he shrugged off concerns about a market downturn:
“You really can’t watch the stock market. If you look at China, they have a 100-year perspective, we have a quarter. We go by quarters.”
A high-stakes gamble
Conventional wisdom suggests that economic downturns are political poison for US presidents. Historically, voters have punished leaders who fail to deliver economic stability. Already, polls indicate that a slim majority of Americans disapprove of Trump’s handling of the economy— and that number is only expected to rise.
More Read
So why is Trump pursuing a trade war that could cause an economic crisis?
The answer lies in his long-term geopolitical ambitions. Behind closed doors, Trump and his MAGA hardliners argue that short-term economic pain is a necessary sacrifice to reverse America’s industrial decline—especially in the face of China’s economic dominance.
Commerce Secretary Howard Lutnick made this clear in a CBS interview earlier this week, stating bluntly:
“These policies are the most important thing America has ever had. It is worth it… The only reason there could possibly be a recession is because of the Biden nonsense that we had to live with. These policies produce revenues.”
This is a bold and dangerous gamble. As a second-term president in his late seventies, Trump is now fixated on securing his political legacy rather than ensuring short-term economic stability.
But there is a fine line between strategic economic policy and reckless unpredictability. Investment and economic growth depend on stability—and right now, the US economy is heading into a period of self-inflicted chaos.
For American voters, the consequences will be profound. For the rest of the world, Trump’s tariff nightmare is only just beginning.
