While Donald Trump might have some social and even political arguments that sensible people might see some merit in (such as taking on the excessive critics in the cancel culture and the left-wing politicians who specialise in creating policies that the majority see as unreasonable), the President’s economic policies are naïve, opportunistic and wealth-destroying.

This US President has tapped into the playbook of previous world despots, threatening the world with tariffs, identifying “cheating” trading partners and immigrants, as well as former presidents and public servants, as the cause of America’s economic demise, when that demise comes down to the poor competitive ability of US manufacturing and the seemingly insatiable appetite of US consumers who are said to shop til they drop.

Making his stupid tariff policies possible are gutless Wall Street CEOs, whose company share prices have been decimated as the stock market’s “what’s rational” filters are blinking that Trump’s tariffs are profit-reducers, inflation creators and job killers.

CNBC looked at the market fallout for the world’s richest this way: “Collectively, the two-day drop wiped out $30.9 billion in net worth for Elon Musk, $23.49 billion for Jeff Bezos and $27.34 billion for Mark Zuckerberg — the world’s three richest people, in that order — according to Bloomberg’s Billionaires Index”.

That’s deserved punishment for being wimps in the first place!

This group of ‘YES’ men and women are like the UK’s Prime Minister Neville Chamberlain, who came back from Germany after talking to Hitler in 1938 declaring he’d negotiated with that madman and was bringing “peace to Europe”. We all know how well that worked out!

Partly explaining the lack of intestinal fortitude from US business and political leaders is the fact that Trump showed, with his 6^th January 2021 riots from his followers, that a US civil war of card-carrying Trumpists versus normal people could eventuate if their beloved leader and his tariffs are cancelled by the sensible majority.

While many countries have overprotected some of their industries and a rational reaction to these unfair trade players is reasonable, the qualified sensible people of the world (let’s call them economists) think the Trump team’s figuring is crazy.

When the gracious and respectable chief economist of AMP, Dr Shane Oliver, looked at the calculations by Trump’s team, this was his reaction: “It’s based on a whacky formula that compares the US trade deficit with a country with its exports to the US – the bigger the gap the higher the reciprocal tariff, for example, for the European Union it is the US’s $236 billion trade deficit with the EU divided by the EU’s $606 billion in exports to the US which gives 39%, which is then halved because Trump is such a nice guy!”

Although our market is set to cop another beating today, it does look like help is on the way. But given the craziness of this elected world leader, you can’t expect the rational to ultimately win the day. The phrase ‘only in America’ was created for a reason. While you can hope, I regularly argue that “hope is not a strategy!”.

Here's what’s happening that could be positive for some development to turnaround market sentiment:

1. A group of tech and finance leaders are off to Trump’s Mar-a-Lago resort to ‘hopefully’ make him get real about his tariffs.
2. Elon Musk is set to leave the Trump team and took a shot at Harvard PhD graduate Pete Navarro, the tariff spokesperson for the President. Musk tweeted: “A PhD from Harvard is a bad thing, not a good thing”. He also asked what Navarro had ever built.
3. Even Trump has contradicted Navarro who said the tariffs were not negotiable.
4. China was right to point out that the “market has spoken” about how crazy these tariffs are.
5. Central banks are ready to cut interest rates if Trump doesn’t go to the negotiating table.
6. There’s the increasing threat of a US recession following this huge market sell-off. I can’t believe Trump wants history to refer to the Trump tariff recession, which would be far worse than Keating’s “recession we had to have”. This error-induced market meltdown could lead to a global recession that didn’t have to happen.

So, how bad could this sell-off be?

The S&P 500 is now at 5074.08. Its recent all-time high was 6144.15. So, the tariff-created slump of stocks has been 17.4%. Chartist think the market could get support at the 4850 level. The market’s peak in 2021, following its post-Covid surge, was 4850 but that historical marker might mean nothing if the Trump tariff team keep spooking world financial markets.

History suggests this doesn’t have to be the start of a scary bear market, as the Stock Trader’s Almanac doesn’t see a fully-fledged bear market coming. It notes that “corrections like the current one only morph into bears one-third of the time,” but that history emanated out of a political scene that never had someone like Donald Trump in charge!

The best take on this tariff-created market smashing came from Wharton School’s Professor Jeremy Siegel, who on CNBC declared: “I think this is the biggest policy mistake in 95 years. This is a self-inflicted wound. It’s an unforced error that did not have to happen.”

One last point! Here’s a table that compares the Trump teams calculations to those of the World Trade Organisation. Someone has either failed maths or economics. Probably both!

This looks like we’re seeing just another case of the use and abuse of statistics. Who would you trust? The World Trade Organisation or an entrepreneur-turned-TV star-turned US President?

As I said earlier, Trump has some supportable views at a social and political level, but it looks like he learnt his economics from a snake oil merchant from the bush!

Pray for someone with guts in the US to make him see sense because only Trump can stop Trump.