Gregory Zuckerman
Appearances
The Journal.
Wall Street Speaks Out Against Tariffs
Wall Street executives were a little bit self-delusional, I think, during the campaign. They heard the talk about tariffs, but they weren't focused on them. They were instead focused on things like lowering taxes, which Donald Trump is still promising, and working on eliminating or weakening regulations.
The Journal.
Wall Street Speaks Out Against Tariffs
There was a feeling that deals were going to come, M&A, IPOs, other kind of things that Wall Street executives really prosper and wish for and hope for. So Wall Street investors and executives weren't really as focused on tariffs and the talk about tariffs as they should have been.
The Journal.
Wall Street Speaks Out Against Tariffs
U.S. markets losing trillions, over $5 trillion in just a matter of days. European markets are also down about 4.5% across the board. Economists warn that we'll tip the world's largest economy into a recession here.
The Journal.
Wall Street Speaks Out Against Tariffs
Then he brought the details, he shared the details of what would come on top of the 10% and that stunned people. And what was that? Well, almost every country was hit with various types of additional tariffs. Reciprocal tariffs. They're called reciprocal. I don't know how they define that, frankly. They use that word reciprocal.
The Journal.
Wall Street Speaks Out Against Tariffs
But they're really just seizing on the fact that we in the United States have a trade deficit with many countries. And to Donald Trump and others in administration, that is in effect a tariff, I think they're saying. But it's not really a tariff. And as they teach in Economics 101, trade deficits aren't necessarily and aren't always because others are cheating us.
The Journal.
Wall Street Speaks Out Against Tariffs
Sometimes it is as a result of manipulation, be it currency or other kinds of things. But sometimes it's just the fact that the United States is the wealthiest country in the world. So it makes sense that we have a trade deficit with others. We buy more of their goods than they buy of ours.
The Journal.
Wall Street Speaks Out Against Tariffs
Yeah, the market did more than fall on Thursday and Friday. It tumbled, it collapsed, but also in ways that were very disturbing. It happened quickly. It happened on volume, on trading volume that was very high. Why are markets selling off because of these tariffs? Well, there are a few different issues.
The Journal.
Wall Street Speaks Out Against Tariffs
The first is the fact that free trade has been the backbone of our economy, global economy, for years. It's benefited many, not everyone, and it's benefited corporations, and they have set themselves up based on this system of free trade. And now corporations around the world are just unsure. They're not even clear. It's not clear to them what they should do. So it's not just the policies.
The Journal.
Wall Street Speaks Out Against Tariffs
It's the uncertainty about whether they're going to stay, whether they're going to be adjusted or not.
The Journal.
Wall Street Speaks Out Against Tariffs
So investors over the weekend were both discouraged and scared, frankly, because they really haven't been able to compare this to anything in their experience. That's what's so confounding to people and bewildering if they've gone through a crisis before where there's some external cause of the downturn that can be addressed by either the government or the Federal Reserve or both.
The Journal.
Wall Street Speaks Out Against Tariffs
We've gone through those before. There's a playbook. for that. There's really no playbook that can be used for a crisis that's self-made in the view of many investors.
The Journal.
Wall Street Speaks Out Against Tariffs
No. So usually in the middle of a crisis, you get reassuring words, even if they're more words than actions. At least it's somewhat reassuring that the government is on your side, feels our pain, is going to work to do everything it can to alleviate the difficulties. In this case, the sense from Donald Trump, from Peter Navarro, from Howard Lutnick was that
The Journal.
Wall Street Speaks Out Against Tariffs
They weren't concerned whatsoever about the market downturn. If anything, they kind of started as a sign that they're having an impact, that they're having the effect that they want. They're looking out for those not in the market rather than those who are.
The Journal.
Wall Street Speaks Out Against Tariffs
This is the most disturbed and discouraged and disheartened I've seen people on Wall Street about policies in Washington, D.C. How many market downturns have you seen? I've seen a lot of crises. I covered the 1998 long-term capital collapse, covered the tech meltdown, covered 2008, and the housing collapse, the coronavirus crisis. So I've seen a lot of financial crises in my career.
The Journal.
Wall Street Speaks Out Against Tariffs
Yes, for the first time, we're starting to get pushback from some of the big names on Wall Street.
The Journal.
Wall Street Speaks Out Against Tariffs
Over the weekends, for the first time, Wall Street leaders began to express their unhappiness. And frankly, a lot of it is self-interest. They were losing a lot of money and their clients were. But there's an addition to that. There's more than that. They are just worried, or some of them that I've spoken to, They're worried about our country. They're worried about our future.
The Journal.
Wall Street Speaks Out Against Tariffs
Some of these people are not losing so much money. They came into this crisis without too much exposure to equities, but they've built careers in this country and they have got kids and they've got future and they know economics and they are bewildered by these decisions that have been made.
The Journal.
Wall Street Speaks Out Against Tariffs
I spoke to a senior investor, one of the most famous people on Wall Street, who literally told me, quote unquote, that he's heartbroken. So far, a lot of heavy hitters on Wall Street have spoken out, even though many of these individuals were supportive of Donald Trump and the recent election. So that's what is also noteworthy.
The Journal.
Wall Street Speaks Out Against Tariffs
These aren't people that have had history of criticizing Donald Trump in the administration.
The Journal.
Wall Street Speaks Out Against Tariffs
So Jamie Dimon is among the few leaders in the financial world that most everyone respects. So when he speaks, people listen. And this morning he came out with his annual statements. It was expected that he would be speaking. And he said many things. He was 60 pages of language. But as part of what he said this morning, he had words of caution about tariffs.
The Journal.
Wall Street Speaks Out Against Tariffs
He didn't say anything out of the norm from Wall Street. Most everybody kind of shares his sentiments, but the fact that Jamie Dimon was going public to express them was noteworthy and newsworthy.
The Journal.
Wall Street Speaks Out Against Tariffs
What do they want? Many are asking for a pause. They're not necessarily saying don't place tariffs, but they're saying, let's give some time. Let's create some room for negotiation. Donald Trump and others, you're unhappy about certain trade policies of other countries. Well, let's give them a chance to address them.
The Journal.
Wall Street Speaks Out Against Tariffs
And instead, we're jumping headlong into a crisis that is, in their view, something that we're creating, which is something they've never seen in their careers. How has this call been received by the administration? It's not clear. Frankly, in the past, in the last Trump administration— was more open to communication from Wall Street. This administration doesn't look as highly on Wall Street.
The Journal.
Wall Street Speaks Out Against Tariffs
Their goal is to help Those workers have been left behind. They've said that. They've been clear about that.
The Journal.
Wall Street Speaks Out Against Tariffs
It's hard to predict these things. We are close to a bear market, so we're not too far away. Listen, the Trump administration could tomorrow— cut a few deals here and there with certain countries and the market will snap back and feel reassured.
The Journal.
Wall Street Speaks Out Against Tariffs
So it's really hard to predict, but the body language we're getting from Donald Trump and others administration is they are not eager or looking to cut deals. I feel as if Wall Street investors and executives, to some extent, are deluding themselves. They're trying to convince themselves that the administration is more amenable to negotiation than they seem to be.
The Journal.
Wall Street Speaks Out Against Tariffs
How long does it take to recover from a bear market? So... Fair markets come and go and investors make money and lose money. And frankly, it's been a long time since we've had difficulty in the markets. We were overdue. That's not really the concern and issue. The real worry is that we maybe have changed the terms of trade. free markets, how stocks and bonds trade going forward.
The Journal.
Wall Street Speaks Out Against Tariffs
How does this one compare? This is unique. This is the first time one can argue it's been self-inflicted. It's a series of decisions that have resulted in a financial crisis. I've never seen that before. This is the first time I've ever seen government officials create a crisis.
The Journal.
Wall Street Speaks Out Against Tariffs
Because even if the Trump administration rolls back some of these tariffs, well, what if they change their minds in six months, in a year, and they put them on again? It's going to create uncertainty for the near future.
The Journal.
Wall Street Speaks Out Against Tariffs
Every American, to some extent, is affected by the market, even if they're not investing in stocks. Obviously, there are those who've got retirements, 401ks, saving for college. They've gotten hurt. But it's more than that. Corporate America right now is uncertain, if not scared. And when executives are unsure, then they don't hire or they cut back on spending. And that affects hiring.
The Journal.
Wall Street Speaks Out Against Tariffs
So I'm worried about employment over the next few months and next year or so. It's not just what this will do to our economy in the United States. It's what it says about the future of free trade, capitalism, the role of the United States in global markets as a leader. And even if Donald Trump and company roll back some of these tariffs, the damage has been done, people say.
The Journal.
Wall Street Speaks Out Against Tariffs
Investors are worried that it just undermines the free market system as we know it.
WSJ What’s News
How a Secret Mortgage Blacklist Is Making It Hard for Condo Owners to Sell
Yeah, so hedge funds, they control a lot of money, but they also have a lot of influence. And it's largely because not only do they manage a lot of money, but they borrow a lot of money. So when they head for the exits, then it affects the broader market, but it especially has an impact on specific stocks.
WSJ What’s News
How a Secret Mortgage Blacklist Is Making It Hard for Condo Owners to Sell
Everything from Apple to Alibaba, a lot of high-tech names, the momentum names, as we call them.
WSJ What’s News
How a Secret Mortgage Blacklist Is Making It Hard for Condo Owners to Sell
Well, the odds are going up. And you see that in the economic figures, consumer confidence, for example. You see that in slowing retail sales and such. But you also see in the markets. The market is charged with anticipating the future. They often get it wrong. But the market is sending a message that we should be nervous about the outlook for the future of the economy.
WSJ What’s News
How a Secret Mortgage Blacklist Is Making It Hard for Condo Owners to Sell
You want to look at the Federal Reserve, but even more importantly, it's all about Donald Trump. And what's really difficult for traders today is to get into his mind and to understand how serious he is about tariffs. Donald Trump has not signaled that he's going to use these as tools, per se. He seems to be more comfortable with an all-out trade war, and that gets to the nervousness out there.
WSJ What’s News
How a Secret Mortgage Blacklist Is Making It Hard for Condo Owners to Sell
Oh, great being here.