Trump’s 'Planned' Stock Market Collapse: What You MUST Know

the most aggressive trade policy the

United States has ever seen was set in

motion last week and it was called

Liberation Day which we might as well

rename liquidation day at this point on

April 2nd President Trump unveiled that

reciprocal tariffs would be set forth on

more than 150 countries putting a

minimum of 10% tariffs on all imports

from any of these countries on this

particular list in addition to higher

tariffs for select countries like China

at 34% Vietnam at 46% and countries like

South Africa at 30% these reciprocal

rates are to go into effect at 12:01 a.m

on April 9th coming up and that's in

addition to the baseline 10% tariff that

went into effect for all these countries

on April 5th most notably so far China

retaliated with their own tariffs last

Friday a 34% tariff on imports of all US

products starting April 10th which

happens to be Mandy Moore's birthday

don't ask me how I know that this

sparked a deep fear that the US is

headed into a global trade war with

other countries and basically sent the

stock market plummeting now over the

weekend while we did have some countries

like India Vietnam and Taiwan zeroing

out their tariffs with the total list of

50 countries calling to negotiate the

stock market still hated the threat of a

full-blown trade war the S&P 500 opened

down 4% then traded up 2% and then back

down to about -2% at the time of this

recording this was mostly due to a rumor

that there would be a 90-day pause on

tariffs which turned out to be not true

now the latest is that Trump is

threatening new 50% tariffs on China if

they do not remove their retaliatory

tariffs from Friday and this is going to

be really dangerous the S&P 500 saw

drops of 5% on Thursday and close to 6%

on Friday and it was the first time we

saw backto-back days where the Dow

dropped more than 1500 points so yes

pretty crazy stuff here now from the

peak of the S&P 500 back in February we

are actually now officially in

correction territory for the S&P and

bare market territory for the Nasdaq a

correction if you remember is a drop of

at least 10% from all-time highs and a

bare market is more than 20% the NASDAQ

has dropped more than 20% since it

peaked back in November around 22% and

so therefore bare market now simply put

the Chinese tariffs had a huge effect on

the market because we import a lot from

China $438 billion as of 2024 whereas we

export $143 billion worth of goods to

China this creates a deficit between the

United States and China and with $438

billion or more worth of goods subject

to higher taxes in the form of tariffs

this is very spooky for markets and the

threat of retaliatory tariffs from one

of the countries we import them most

from is causing a lot of panic in the

stock market so what's going on here and

why does it seem like the US wants a

trade war with the entire globe there

are multiple theories one is that the US

wants to assert its dominance another is

that Trump wants to emphasize this

America first approach and the strongest

theory at play right now is that Trump

is intentionally doing this he wants to

intentionally crash the market in order

to lower interest rates as a byproduct

of that which is a very high-risisk

strategy that we'll talk about later but

Breakdown

first let's actually break down the

Liberation Day tariffs and the

controversy surrounding last week's

event the day of the tariff announcement

many people were confused on how we

landed on the tariff rates for all these

150 countries listen in on Trump as how

he describes what he's going to charge

China if you look at that China first

row China 67% that's tariffs charged to

the USA including currency manipulation

and trade barriers so 67% I think you

can for the most part see it 67% is what

he said China charged us and it didn't

take long for the internet to realize

that not only was this inaccurate it was

almost calculated in too much of a basic

way it's actually not a measure of trade

barriers it's more of a measure of the

trade gap between China and the United

States if we read this tweet from Guyer

Capital he says that the tariffs charged

to the USA is simply the nation's trade

deficit with the US divided by the

nation's export to the United States so

take Vietnam which has a 90% tariff rate

as listed on the Liberation Day list

vietnam exports $136.6 6 billion to the

US it imports $13.1 billion worth of

goods from the US and that means the

total deficit is $123.5 billion the

deficit divided by exports is the 90%

rate that is being reflected here from

there the United States was like "All

right let's just take half of that and

then slap that tariff onto Vietnam." And

that's basically how it was calculated

so these tariff rates are definitely

overblown for context many of the

world's largest economies have an

average trade weighted tariff rate below

5% china's tariff rate was closer to 3

or 5% according to visual capitalist you

can also see that America's weighted

average of tariffs is 2.2% here and that

was the average that we were charging as

a country before all of these policies

started to go into effect the average

tariff rate countries charge the United

States was close to 7 or 7.5% so yes

that means there was a tariff imbalance

from most of the countries to the United

States but now what's happened is that

the US has gone way too far the other

way and now all the US tariffs to other

countries is a minimum of 10% all the

way up to 34 40 45% for some of these

countries and this naturally brings a

ton of questions what do we hope to

achieve by placing tariffs on these

countries what does it mean for your

wallet and what does it ultimately mean

for the stock market earlier on in the

Trump's Three Strategies

video I mentioned three specific

strategies so let's actually talk about

those the first strategy or theory here

is that the US wants to assert its

geopolitical dominance according to

Tanvi Ratna on Twitter who spent her

career at the intersection of

geopolitics economics and technology

this is what she says she says that

before tariffs Trump's team signaled a

global order reset pulling back from

NATO cooling EU ties and opening up

diplomatic space with Russia and Saudi

Arabia tariffs now serve as leverage to

renegotiate terms based on America first

policy and that we should expect a lot

of bilateral deals in the coming months

that's where countries will play ball

with the United States and we hope to

trade lower tariffs for strategic

concessions on trade security and

industrial policy this whole thread is a

really good read on Twitter and I'll

reference more of it shortly but I will

also leave it linked down below for

those of you that want to read the whole

thing the next strategy or theory of why

even have these tariffs is more from a

protectionist angle famously we had a

protectionist era of policy in the

United States from 1861 to the early

1930s the primary goal of tariffs then

was to shield American industries from

foreign competition and to also raise

revenues for the government during the

civil war which started around this time

this protection era lasted 72 years

until you guessed it the great

depression and that's where tariffs

actually became a problem for the US

economy because foreign countries

retaliated with their own high tariffs

causing global trade to collapse by

nearly 2/3 this showed the United States

at the time that extreme protectionism

was counterproductive to growing the

economy and so in 1934 the Reciprocal

Trade Agreements Act was put into place

that's a mouthful and it began the free

trade era the US was now going to

practice reciprocity as the main way of

doing business this era was status quo

from 1934 all the way to 2018 when Trump

started implementing tariffs on China

now for the most part we still operated

under a free trade agreement and

reciprocity until of course this year

and another theory as to why we are

pursuing this aggressive trade policy

was detailed by Tonv rottna in the same

thread from earlier and was actually one

that Donald Trump himself appeared to

agree with when he reposted a Tik Tok

video supporting the same theory and

that theory is that he wants to

intentionally crash the stock market in

order to lower bond yields the context

here is that since the United States has

a huge debt problem $9.2 trillion

dollars in debt that needs to be paid

off or refinanced in the year of 2025

that the aggressive tariff policy is how

he's planning to combat that so here's

how the plan works since $9.2 trillion

needs to be refinanced in 2025 just a

near50% interest rate drop would

represent $50 billion in savings over

the next 10 years and the method to do

this is to literally manufacture

uncertainty according to Tonvi and in

other words Trump might be wanting to

willingly crash the stock market in

order to flood money into long-term

treasuries if money floods into

long-term treasuries this should push

the prices of bonds upwards since there

will be more demand for them now you

have to know that the price of bonds and

yields actually have an inverse

relationship so as more demand for bonds

goes up the bond prices go up and then

yields will come down lower yields would

allow the government to possibly

refinance the $9.2 trillion in debt

coming due we are already kind of seeing

this reflected in the 10-year Treasury

rate as of the weekend it was sitting

around 4% down from 4.77% from the high

in January this policy in addition to

the Doge spending cuts could help reduce

the deficit then the idea is that

because tariffs make imports so

expensive that this should give room for

US producers to step in and be

incentivized to produce competitive

products here that is if the policy

actually sticks around for a while there

are also supposed benefits of

geopolitical leverage with this move and

the takeaway here is that if we can

lower yields this actually eases our

federal debt crisis the tariffs will

jumpst start domestic growth and

geopolitics will be rewritten in

America's favor and this is quote

disruption by design with enormous

stakes big juicy ribeye stakes i'm just

kidding that's not the type of steak

we're talking about now Trump's latest

post to True Social also are in line

with this strategy he posted urging

Jerome Powell to lower interest rates

stating that this would be a perfect

time to cut interest rates and that post

was written on Friday the day when China

put reciprocal tariffs in place now this

strategy is well super risky if it

doesn't work out the US will have to

deal with more inflation across the

board since tariffs will increase the

prices of goods indefinitely retaliation

among other major economic countries

like China are a huge possibility it's

already happened with China but it could

also happen with other big countries

this becomes a huge game of chicken and

as of right now JP Morgan believes if

the tariffs are sustained a recession is

imminent not only for just the United

States but the entire world if inflation

actually increases due to the policies

not working out or taking too long to

work out the Federal Reserve might

actually raise interest rates which

would just make the debt problem worse

My Take

so what is my take in all of this i

think that this huge Liberation Day

announcement is basically a huge bet and

negotiation tactic trump's the kind of

person that is not afraid to stick to

what he says no matter how unreasonable

it might be and he's using the leverage

that the US has in the global economy in

order to bully around other countries in

order for them to comply now since he's

so erratic other countries probably have

to take him more seriously than if it

was just your average politician

imposing tariffs uh because with Trump

they actually have to consider that it

could be a real threat now after 2 years

back toback where the stock market was

up over 20% each year valuations and

bond yields just got really high i was

in the camp that this couldn't last

forever if you check out my investing

video from 2024 talking about my

investing plan for 2025 I wanted to have

a little bit more cash on hand for

opportunities because I just thought the

market was trading very frothy and at

very high valuations i personally just

didn't think that the gains would be

erased this quickly these tariffs will

likely make the prices of goods go up a

lot of what we consume especially if

those goods are from other countries if

you're coming at this from an investment

angle I think the name of the game for

your portfolio is just simply to survive

if you're investing for a long period of

time say 10 20 30 40 years from now it's

likely that you won't really have to

worry about the short-term volatility

that we are experiencing and perhaps

this is an opportunity for you to buy

more the volatility index or the VIX was

up close to 45 last week and typically

after it reaches that level we see the

market on average being positive 75 to

83% of the time between 1 day and 2

weeks after that point so if you do have

some extra cash laying around you may

want to dollar cost average slowly as

prices drop and then it's just about

hoping that these policies don't last

forever because if they do we could see

further pain now my opinion on American

factories actually starting to produce

more things in the United States and

avoiding international supply chains

would be that these tariffs would

actually have to stay in place for years

companies like Ford can't just change

where they make cars overnight and they

might not want to hire a bunch of

headcount if they know that these tariff

policies are just going to change

tomorrow in terms of what types of

scenarios I'm going to be looking out

for I think that if multiple countries

enter a prolonged trade war I would put

chances of a recession at more than 50%

and definitely upwards of 75% but that's

just my gut feeling in terms of what

economic indicators to pay attention to

in the coming months we should

definitely monitor the 10-year bond

yield we should see how Q1 GDP comes in

at the end of April and we should

probably also monitor what the Federal

Reserve does if the Fed starts lowering

interest rates or the economic data we

get back is a step in the right

direction we know that the policy might

be working similarly if countries start

coming to terms quickly with the US we

know that these policies might be

working as an example Vietnam had

already called the United States last

Friday and wanted to work with us to

reduce tariffs to zero if the Fed cuts

rates like Trump wants his plan might

actually work but nobody knows how long

he'll keep these tariffs going so right

now it's just like a giant experiment

using our economy as the lab wish I had

better news for you guys i plan to keep

you guys more updated as time passes so

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