Here’s a phrase that my fellow millennials will know by heart and probably chuckle at: How many once-in-a-lifetime events can one live through?
I bring this up, obviously, because of the wild rollercoaster ride that we have experienced since February with President Donald Trump’s discussion on tariffs with longstanding allies like Mexico and Canada, as well as uneasy partners like China.
After a lot of buildup and delays, Trump finally delivered on his promise on April 2, dubbing the day “Liberation Day.” Imports from 57 countries were taxed between 11% and 50%, starting this week – which triggered a stock market crash not only in the United States, but also in Germany, Hong Kong, Japan and in Europe.
Taking in the events of the past two months, I’m reminded of what one non-profit leader told me when the federal Office of Management and Budget froze all federal funding.
“This is like COVID all over again.”
Not to say that what we are experiencing is as deadly as COVID-19 was – I remind our readers that not only did that completely shut down our economy for two months, it also killed a reported 7 million people worldwide – and it’s estimated to be even more.
But, as a journalist, it’s pretty easy to spot the key similarity between the two: the uncertainty of day-to-day life. How do you make a business plan when you’re not sure what the next day brings? How do you make smart decisions with your child’s college fund or your 401K when the news changes on a dime?
It’s not just the stock market that likes stability; it’s the small business owners and workers that need it, too. We, at the Delaware Business Times, have struggled in the last two weeks to try and speak with local business leaders and it has been difficult to get anyone to return calls. This time, I don’t think it’s about fear. I think it’s about just not knowing what to say because things have been changing direction on a dime.
I think it’s telling that at least five requests went unanswered on April 9, but three sources and trade associations mysteriously appeared in my inbox after 1:30 p.m. – when the president announced he was backing off on his extreme tariffs but doubling down on those imposed on Chinese goods.
I don’t blame our business leaders and trade association friends. I can’t imagine what I’d say to my peers, let alone a reporter, in this climate. It’s like trying to hit a moving target when it comes to predicting what comes next, because I don’t think anyone has ever thought about the severity of what this trade war would look like.
It’s not just selecting items or a country – it’s everything. NPR, ABC News and New York Times has excellent reporting about the breadth of what will see price rises. The United States imports 85% of its seafood and we are the largest importer of coffee in the world. It’s a good thing that Mexican goods are exempt from this trade war as the Port of Wilmington handles most of the bananas the U.S. receives from Latin America.
Cars are also expected to take a big hit, too, as Trump has kept the 25% tariffs on automotive imports like parts and cars themselves. Chrysler’s parent company Stellantis announced in the first week of April that it would temporarily shut down production on plants in Mexico and Canada, affecting the five U.S. facilities that rely on them.
Let’s not forget the continued stickiness of inflation. The Consumer Price Index rose 2.4% in March, showing a slight slowdown in inflation but still a long way to go in the Federal Reserve’s fight to bring it down to 2%.
All this to say is that this story is evolving hour by hour, and sometimes, if we’re lucky, week by week. It would be silly to make assumptions about what the final endgame of this trade war is.
I do, however, hope that there is some stability on the way for our economy. During the COVID-19 pandemic, being nimble and able to pivot was what saved a lot of businesses and workers. But how is that possible when the message we start every day with could be completely different from the one we receive by the end of the day?
