Ladies and gentlemen, the tariffs have been delayed. Cue the confetti, pop the bubbly, and yes, cue the penguins waddling around in Wall Street vests, flapping in celebration. Wall Street surged with the Nasdaq rising +12.2% and the S&P 500 up +9.5% despite ongoing US-China frictions.
The upside reversal was breathtaking and unsurprising but beneath the surface, the foundation is cracked. This is not just about a policy pause. Confidence has taken a hit and unlike stock prices, trust does not bounce back in a couple of positive sessions. Even if these tariffs are permanently shelved (a big if), the lasting damage is already visible. Investors and CEOs alike now operate under a permanent sense of unpredictability.
Under pressure from Wall Street suits, jittery C-suite executives, and a growing choir of billionaire Republican donors growing pale with every tick down, and a bond market staring into the abyss and yeah, the “Tariff Man” folded.
Sure, the Trump administration might manage to patch over the market losses with well-timed tweets and tariff walk-backs. As any seasoned investor knows, reputational damage is not something you price in and forget. This is no longer just a political story, it is a macro risk.
Whether you realized it or not, you just lived through one of the most important dramas in economic history. President Trump, whether intentionally or not, has now earned a new title as the world’s greatest stock market manipulator. When a single tweet can erase or restore trillions in value, this is not a time for autopilot for any investors.
Here is another reality check for Trump. China is no longer an easy target. The era of poking fun at the Chinese to score political points is over. Beijing has learned, adapted, and grown more resilient and the global markets know it.
There is a prevailing narrative that constantly predicts the imminent collapse of the Chinese economy. To be brutallly honest, I’m more concerned about the Western economy.
Volatility is here to stay, and the homework now is not just about calculating earnings and inflation. It is about assessing political risk, something Americans once comfortably outsourced to emerging markets.
So yes, let the penguins cheer. Just remember that the ice has already cracked.