on March 10, 2025
Here’s a letter to MarketWatch.
Editor:
Barbara Kollmeyer reports that President Trump’s explanation for the dive in corporate-share prices since he unleashed his tariff frenzy is that, quoting Mr. Trump, “‘a little time’ may be needed for his tariff plan to start returning wealth to Americans” (“One of Wall Street’s biggest bulls now says a flash crash can’t be ruled out,” March 10).
Apparently Mr. Trump is as ignorant of financial markets as he is of international trade. Financial markets are forward looking, capitalizing in today’s asset prices expectations of future changes in productivity and the state of the economy. Therefore, if his tariff policies were truly destined to return wealth to America, Wall Street would now be stampeded by bulls. The fact that instead Wall Street is overrun by bears, with bulls nowhere in sight, is evidence as good as evidence gets that people with actual skin in the markets understand that protective tariffs as such, as well as Trump’s chaotic uses of them, are not returning wealth to America but, rather, draining wealth from it.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
