On Monday, global stocks whipsawed over President Trump’s tariffs, a bear market briefly became official in the United States and tit-for-tat retaliation with China intensified.As trillions of dollars in corporate value evaporates and Mr. Trump’s support in the business world is cracking, even Republican members of Congress are debating whether to take away the president’s power to wage a trade war.Andrew Ross Sorkin, who covers business and policy, and Jonathan Swan, who covers the White House, talk through the tumultuous past few days on the stock market.Guest:Andrew Ross Sorkin, a columnist and the founder and editor-at-large of DealBook, which publishes the flagship business and policy newsletter of The New York Times.Jonathan Swan, a White House reporter for The New York Times.Background reading: DealBook: Does Mr. Trump Have an “Off Ramp”?What is a bear market? Are we in one?China says it will “fight to the end” after Mr. Trump threatens more tariffs.For more information on today’s episode, visit nytimes.com/thedaily. Transcripts of each episode will be made available by the next workday. Photo: Timothy A. Clary/Agence France-Presse — Getty Images Unlock full access to New York Times podcasts and explore everything from politics to pop culture. Subscribe today at nytimes.com/podcasts or on Apple Podcasts and Spotify.
Chapter 1: What triggered the recent market turbulence?
Monday was yet another dark day on Wall Street, as global stocks whipsawed over President Trump's universal tariffs. A bear market briefly became official in the U.S., and tit-for-tat retaliation with China intensified.
President Trump is doubling down, now threatening even bigger tariffs on imports from China, 50%, if the country does not revoke its retaliatory tariffs on American products sold there.
Now, as trillions of dollars in corporate value evaporates, Trump's support in the business world is cracking. And even Republican members of Congress are debating whether to take away Trump's power to wage a trade war.
There's no escaping the fact that business leaders are really losing confidence.
Bill Ackman, a billionaire who helped to fund the Trump campaign, has called for a pause in tariffs, warning of what he calls a self-induced economic nuclear winter.
This is Wall Street screaming at the White House. If this is help, we don't want your help. Please stop now.
Today, Andrew Ross Sorkin with the view from the stock market and Jonathan Swan with the view from the White House. It's Tuesday, April 8th. Andrew, thank you for coming in the studio.
Thanks for having me. What a day.
Another what a day day.
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Chapter 2: Why are Trump's tariffs causing such a massive impact on stocks?
Another what a day day.
Yeah. Well, when things go really haywire in the markets, We like to bring you in. We reserve you for the— For the crises. Yeah, for the crises. And I think we should start by talking about really the scale of the stock market sell-offs that we have witnessed over the past few days. Just put that into some perspective.
Well, look, if you just look at how much money has been lost, we're talking about trillions of dollars with a T. But in percentage terms, you can look over just even the last week, we're down 10%. Peak to trough from the sort of heights of where we were near the election to now, you could argue we're over 20% off, maybe more, depending on how you do the math.
Right, and that's just worth pausing on. One-fifth the value of certain entire stock indexes. That's just a tremendous amount of wealth.
Poof. It's a tremendous amount of wealth poof in the sort of broader scheme of the universe. But to make it feel personal, let's just say you had a portfolio and you were a retiree and 20% of your wealth went poof overnight. And it went poof overnight because of a... man-made crisis.
You know, most of the crises that I've come in to talk to you about, whether it's in 2008 or it's the pandemic or whatever, there's been something that has happened ostensibly beyond our one human's control. Right. This is a panic that has been brought on by a particular person with a particular decision around, in this case, tariffs.
Right. Donald Trump's decision to impose what are being described as universal tariffs have essentially crashed global stock markets. There's no other way to put it. So explain exactly why Trump tariffs equals the stock price of some of the most admired and financially seemingly well put together companies in the country.
Well, let's go through a couple of specific stocks and then let's talk about why it's impacting virtually every company in America and frankly the world.
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Chapter 3: How are major companies like Apple and Meta affected by tariffs?
Mm-hmm.
So the easiest example is to look at a company like Apple. Its stock has dropped, by the way, about 18% in the last five days alone. Wow. That is about $700 billion of value destruction, $700 billion wiped out. And you might say to yourself, why? Well, Apple's a company that manufactures a lot of its goods in a combination of places like China, increasingly in places like Vietnam and India.
In fact, Apple moved a lot of its manufacturing out of China to places like Vietnam and India, in part because of pressures from the U.S. government over the last several years in the relationship between the U.S. and China. And one of the reasons they did that was because there was always a concern that perhaps there would be tariffs in the future or national security issues.
Mostly aimed at China. Mostly aimed at China. There was never an expectation that if you were manufacturing your iPhones in India or Vietnam... that all of a sudden you are going to have to pay every time you shipped those phones into the United States something on the order of a 50% plus tariff, which is what we're talking about here.
That was your Apple phone ringing.
That was my Apple phone, probably built in China, ringing, which would be tariffed if I bought a new one tomorrow. And so all of a sudden, if you're Apple, you are either going to have to do one of two things.
Either you're going to have to charge the American consumer ostensibly 50% more for the phone than you did before, or you're going to have to eat some of that cost, which is going to ultimately cut into your profit and therefore cut into all sorts of other things you do, which is to say, how are you going to think about hiring next year? What does your research and development budget look like?
Are you going to advertise as much as you did last year? And by the way, if the price point for the phone is higher, are there as many people who are going to buy it? And therefore, all of the economics of everything you do... Just went sideways. Just went sideways. And all of the interactions that you have with other businesses just went sideways.
And so the downstream effects, not just at Apple... but everywhere just cascade.
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Chapter 4: What is the business community's reaction to the tariffs?
They're going to come into the store with the same Really?
Even the kind of commodity-style, low-cost product of a McDonald's cheeseburger and a Starbucks medium cappuccino?
Even a McDonald's or Starbucks is starting to see the effects of it. Not just even the last week. It's actually been something that's been something they've been concerned about now for several months.
They're worried about tariffs.
These companies have been worried about what— Tariffs mean to the relationship that the United States has with the rest of the world. What does the the American dream halo effect that was over all of these American brands in places like China, in places like Europe? Well, that polish is coming off. Because citizenry in these places are saying, we're upset with these people.
We may not want to go to a Starbucks. We may not want to go to a McDonald's. We want to support our own local company. In fact, I keep hearing actually that some of the big consumer brands are talking about future advertising plans that are much more local, meaning don't focus on it being an American brand. Hmm.
Whatever love people had for the sort of soft power of America and whatever they liked about and thought about our country and our businesses and our industry, there are more concerns about them than they used to be.
Now, it may right now be on the margins, but longer term, I think there are bigger questions about whether the toothpaste is now out of the tube, no matter what the tariffs ultimately turn out to be. And how do you get that toothpaste back in the tube if you can't?
How many business leaders that you talk to are calling up the president and saying, hey, this is not sustainable. This is really a problem for us. Look at our stock price. This is a really, really big deal.
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Chapter 5: Are there any notable exceptions in the business community's stance?
Help me help you. I think that is the way... The CEO community is trying to position themselves with this president because I think if you go straight at him, publicly or privately, the phone call ends quickly.
Well, there are two exceptions to what you just said over the past few days. One of them involves a billionaire investor named Bill Ackman, who throughout the presidential campaign vocally supported Donald Trump. And he, over the past 48 hours or so, comes out and says what many in his world do not. These tariffs are a big mistake.
But I want to stop you for a moment because he then put out tweets this morning. effectively apologizing for some of his earlier comments about Howard Lutnick, the Commerce Secretary.
I did notice that.
And I think that's indicative of what so many... senior executives are thinking about, which is, what can I say publicly, especially if I want to have access privately?
Fascinating. That billionaires get spooked, but they do, by this president.
The whole idea that if you had a lot of money, you were somehow protected, or that you would feel compelled and feel emboldened to stand up, so far has not been the case.
Let's talk about the second exception, which was Elon Musk. He says over the past few days – and we should establish, not that it needs saying, that his Trump-loyal bona fides are pretty much unquestioned at this point. He says, I think that we should be living in a world of zero tariffs between the United States and the European Union. specifically.
It's a pretty subtle but clear way of saying that this Trump universal tariff program, this is not good.
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Chapter 6: What are the long-term implications of Trump's tariff strategy?
If you don't, and the pain of moving is high, you may try to play this out and see what happens.
What you're describing would seem to be an incentive structure for the president to create certainty. And that certainty would seem to be... I'm determined to keep these tariffs in place. And I did notice today, we're talking on Monday, that when there was a brief moment where someone posited that there might be a pause, these might be, they shut it down. They said, no, this is for real.
This is for keeps.
Because from a negotiating position, and the president talks about this in his book, The Art of the Deal, this is what they describe as anchoring. It's called an anchoring technique. which is to say that you state your position and you hold your position. And the moment you break from that position, it becomes a lot harder. And so you're 100 percent right.
The second that they start announcing that they are taking a pause or that they're willing to do a deal at a lesser number or whatever it is.
They've undermined their own.
They've undermined their own case. The business community has a phrase that they've been using all weekend, which is what is the off ramp, which suggests that there is one and there might not be an off ramp.
After the break, White House correspondent Jonathan Swan on how President Trump himself is seeing this moment.
We'll be right back.
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