Regardless of your personal views on Donald Trump, the reality is that he will be serving as President of the United States for the next 3.5 years, and it’s clear he will remain a highly polarizing figure throughout his term.
His recent tariff announcements have sent shockwaves through the stock market, triggering a sharp sell-off, with signs pointing to further declines as we head into Monday’s session. While I had anticipated a broader market pullback in the first half of 2025, this downturn is proving to be more severe than expected.
I’ve always acknowledged the cyclical nature of markets, and following the exceptional gains we saw in 2023 and 2024 in the S&P 500, I believed 2025 would bring slower, more muted growth. Unfortunately, what we’re seeing now is far more abrupt and driven by geopolitical uncertainty rather than just market rotation.
So if you’ve been reading financial headlines lately, you might think the current market crash, down 20% from the February highs, is entirely Trump’s fault, right? All because of his tariffs?
Well, I’m not entirely convinced. Here’s why.
First off, I don’t believe this sell-off is solely the result of Trump’s trade policies. The markets were already showing signs of weakness ever since DeepSeek shook investor confidence with its supposed low-cost LLM that allegedly didn’t require NVIDIA GPUs (which, of course, turned out to be false). That was the spark, but deeper fears are at play, some are worried that 1) our economic expansion has peaked, and 2) the so-called American empire may be entering decline.
And let’s talk about China. If you still think China is just producing cheap knockoffs of Western innovation, you’re way behind. Take a few minutes on YouTube to check out some of China’s new luxury car brands, they’re not just catching up; they’re starting to impress.
But does that mean American industry is in trouble? Not necessarily.
Yes, China is advancing, but they’re also facing major headwinds: a collapsing housing market, aging demographics, rising debt levels, slowing economic growth, and rampant youth unemployment. Those aren’t the hallmarks of a country ready to take over the world, they’re signs of deep structural issues.
Now, Trump has long been critical of China. His current play seems to be about “leveling the playing field,” using tariffs to pressure countries he believes are exploiting the U.S. economically. You could argue that these tariffs are more of a bargaining chip, his way of pulling other nations into negotiations. We all know how much he thrives on deal-making.
But does this mean American industry is doomed? Or is it part of a broader, more aggressive economic strategy?
Trump’s approach appears to be centered around reviving domestic manufacturing and energy independence. His plan includes tax cuts, reduced government spending (cue the return of the deficit hawks), deregulation, expanded domestic drilling, and tariffs designed to bring jobs back to the U.S. Will it work? Hard to say.
What is clear is that this strategy marks a sharp pivot away from globalization. It’s protectionist. And that shift, combined with the unpredictability of Trump’s methods is what’s really shaking investors. We’re not just seeing a market correction; we’re witnessing a potential reset of the global economic order. And uncertainty like that spooks the market.
If you believe in Trump’s vision, if you think his plan will bolster U.S. industry, then maybe this is the perfect time to buy the dip. Companies like Apple and NVIDIA have already pledged to invest billions domestically and shift some manufacturing back to the U.S., and the Fed might respond to the volatility with rate cuts, injecting liquidity back into the system.
But if you think this strategy won’t work, if you believe the U.S. is heading toward a deeper crisis while the rest of the world struggles through a downturn, then maybe it’s time to hedge. Think gold, Bitcoin… and yes, maybe even Chinese equities.
As for what I’m doing? I’ll let you draw your own conclusions.
