After some days from stock market hell, thanks to Donald Trump’s tariff traumas for countries and companies set to pay a price for his questionable trade policies, Wall Street went positive on Wednesday, but it didn’t last!

Stocks fell on Thursday as Donald Trump loaded a new round of threats aimed at Europe.

This is how CNBC reported the situation this morning: “Trump took to his Truth Social platform Thursday morning to threaten 200% tariffs on all alcoholic products coming from countries in the European Union in retaliation for the bloc’s 50% tariff on whisky. This will be great for the wine and champagne businesses in the U.S.” he wrote. Trump later remarked that he wouldn’t be changing his mind on a broader group of tariffs set to be implemented on April 2.”

As CNBC commented: “The disorderly rollout of Trump’s U.S. trade policy has rattled markets this month, with investors worried it was pressuring corporate and consumer confidence. The losses have intensified this week.”

I know many people in the US and even around the world liked many of Donald Trump’s policies, especially those that opposed unreasonable demands from social groups often called “woke”. But his tariff plaything policies are conjuring up similarities to the mad king from the fantasy blockbuster Game of Thrones!

In this epic TV series, son-in-law Jaimie Lannister, ultimately rids the kingdom of the monarch known for his cruelty, paranoia and obsession with tariffs (no, sorry it was fire!) and he became known as the “king slayer”.

On Wednesday US time, helping to hose down market fears was a good inflation read that should help the Federal Reserve think about another interest rate cut.

Rate cuts are good for stock prices and help fight recession fears that have escalated recently, on what I’d call pretty flimsy economic data.

I hate these over-dramatic days when short-term ‘opportunists’ sell into a market sell off, adding momentum to the sell off.  While they do create buying opportunities for the long-term investor, the whole experience is unsettling. That’s why I’m writing this.

This market negativity is bound to be with us until as late as April 2, when we should hear more about President Trump’s tariff plays. This week he meets the top US CEOs at a business round table. Some of them have to have the backbone to make him moderate his blanket bashing of his allies, his trading partners and the companies whose share prices feed into the retirement portfolios and money bottom of many Americans.

Finance legend, Professor Jeremy Siegel of the Wharton School of the University of Pennsylvania told CNBC that the President’s desire to create 100,000 jobs for businesses that are uncompetitive has cost the market and many related investors $20 trillion with this sell-off.

He wondered if the retirees in Florida, many who might have voted to ‘make America great again’ by supporting Donald Trump, would be happy about his tariff policies now.

We should expect tariff talk to keep spooking stock markets until uncertainty about who’ll be affected, what the extent of the tariffs will be and then the expected retaliation effects, become clear.

However, if you’re worried about this sell-off, which has been close to a 9% fall in a month for the ASX 200 index, here are few things to digest:

1. I did tell you that AMP’s Shane Oliver a month or so ago tipped a 15% correction was possible, but he also tipped stocks would be up by the end of the year.
2. CNBC reports that “Economists say Trump is proving to be an “agent of chaos” with his unpredictable trade tariff policies — but note that a downturn isn’t on the cards just yet.”
3. “I don’t think we will talk about a U.S. recession. The U.S economy is resilient, I would say, largely despite Donald Trump,” Holger Schmieding, chief economist at Berenberg Bank, told CNBC’s Squawk Box Europe on Monday.
4. Smart players are waiting for the bottom of this sell-off and will buy quality companies beaten up because of this tariff-driven slump in stocks.
5. Inflation was down to 2.8% overnight in the US, which will help rate cuts happen sooner than expected.
6. Wall Street’s reaction to tariffs could also bring rate cuts in earlier than expected.
7. And I like this from CNBC: “First, the bad news: Data shows the [stock market] drop has happened at an unusually fast clip. Now, the good news: Situations like this historically gave way to a rebound. This rout marks only the 17th time going back to 1953 that the S&P 500 has fallen at least 7.5% from an all-time in three weeks or less, according to data from Bespoke Investment Group. This time, the sell-off has been driven in large part by mounting uncertainty around PresidentDonald Trump’s tariff policies.

[And this is the good bit…]

“Every time is different, and the tariff hammer that seems to come out every time the market attempts to rally is making for a difficult market environment,” research house Bespoke revealed.

One last important point: the actual impact of the tariffs is less than what the market has predicted with its sell-off.

Have a look at this from the Bank of Canada: “The tariffs being imposed are significant and will have implications for the Canadian steel and aluminium sectors. But as we noted in our tariff playbook, size matters when it comes to assessing the broader economic impact of tariff increases. Steel and aluminium together account for just about 0.5% of Canadian gross domestic product and jobs, and about 3% of Canadian exports. Quebec and Ontario are the most exposed provinces where these industries represent 1% and 0.6% of GDP, respectively.”

This stock market sell-off on tariffs that could hurt 0.5% of Canada’s total production looks over the top.

Of course, if Trump is crazy enough to put a 25% tariff on all Canadian goods and services, it could reduce economic growth by 2.5% to 3%, which would create a recession.

I can’t see that happening, but I have never taught or studied Trumponomics. So, we have to hope this business roundtable of US CEOs with the President will lead to less market-negative outcomes.

Finally, I see stocks rebounding on:

1. Lower interest rates.
2. Artificial Intelligence helping company bottom lines.
3. Trump will start talking tax cuts and deregulation.
4. A Chinese economic comeback.
5. The real impact of this trade war will prove to be less than what the market is surmising right now.

Like Shane Oliver, I expect 2025 to be another good year for stocks, despite the bad vibes right now.

If someone other than Donald Trump was the US President, I could be a buyer of stocks now. But as we saw overnight, it seems Donald Trump can say anything to win.

One of Trump’s important mentors was a New York business wheeler and dealer called Ray Cohn, who had three rules that he reportedly gave to a young Donald. And here they are:

Rule 1: Attack, attack, attack.

Rule 2: Admit nothing and deny everything.

Rule 3: No matter what happens, you claim victory and never admit defeat.

Young Donald learnt these lesson well and we’re seeing this on a daily basis, regrettably!

Someone in the corridors of corporate power will have to slay these mad tariff actions. That’s why I think this sell-off will eventually give way to a rebound, but there needs to be someone with guts and influence who Mr Trump will listen to.

By the way, on February 26, NBC reported the following about Elon Musk: “Since mid-December, the tech titan's net worth has declined by more than $100 billion, or approximately 25%, as a sell-off in shares of Tesla, his electric car maker, has accelerated in recent weeks.”

Since then, Tesla’s share price has fallen another 17%. So, Elon has lost even more. He might be the smart guy who needs to have a little talk to his boss.