On April 2, the much-awaited “Liberation Day” turned into “Liquidation Day” following President Donald Trump’s tariff announcements. A dramatic stock market sell-off ensued over a couple of days, a veritable bloodbath. Dow Jones, S&P 500, and Nasdaq crashed between 6 per cent and 11 per cent, the Shanghai composite declined by 6 per cent, the Hang Seng, the hardest hit, by 13.2 per cent, Taiwan by almost 10 per cent, its largest one-day drop on record, Japan’s Nikkei index fell by nearly 8 per cent, Europe was down between 4 per cent and 6 per cent, and India by over 5 per cent.
Bill Ackman famously warned of an economic “nuclear winter,” as escalating trade tensions and the potential for a global commerce war spiked the volatility index and spread panic on Wall Street. Those who stayed up over the weekend to read the tea leaves were relieved that April 7, instead of being “Black Monday,” witnessed what many called a “see-saw,” rather than smart, recovery. Experts debated whether the US market was a coiled spring waiting to bounce back or a falling knife, dangerous to try to catch. Critics mocked that Trump had no economic sense and his promised liberation had turned into a financial liquidation. Many of the world’s leading companies, including the magnificent seven, were down even more. Some were trading 35 per cent lower than their 52 week tops. Had Trump’s tariffs triggered an economic collapse?
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