The White House certainly had a story that it wanted to tell on Wednesday when President Donald Trump suddenly announced a 90-day pause on most of the tariffs he had introduced on “Liberation Day” a week earlier.
Sure, the initial announcement led to several bad days for the stock market and even big worries in the bond market.
However, once Trump announced the reversal, the markets flipped, leading to the most positive day on Wall Street in almost 25 years.
Trump’s team and many of his supporters took a victory lap on Thursday night, with some even implying that Trump’s announcing the tariffs and backing off a week later was the plan.
That strategy might have worked had the markets stayed humming on Thursday.
But that’s not what happened.
Donald Trump Has Tariff Problems: A Thursday Drop in Stocks
On Thursday, the Dow dropped 1,300 points, with the S&P 500 dropping 4 percent, as the market took back many of the gains that had been posted the day before. Apple and Tesla, per CNBC, led the decline.
Why the drop? Per CNBC, “losses accelerated after the White House confirmed to CNBC on Thursday that the cumulative tariff rate on China would actually total 145%.”
Also on Thursday, Amazon CEO Andy Jassy confirmed that Amazon‘s network of third-party sellers would be passing the costs of the new tariffs on to customers, especially on the many products the retailer sells that are sourced from China.
According to a Wedbush Securities estimate cited by CNBC, that’s up to 70 percent of goods that are sold on Amazon.
The tariffs that remain in place include the China duty, the 25 percent tariff on Canada and Mexico on items not covered by the United States-Mexico-Canada Agreement, and the across-the-board 10 percent levy.
One analyst told CNBC that “investors have sobered up,” and continue to see uncertainty on where the China tariffs will end up. Plus, even with most of the tariffs on goods from different countries now paused until July,
“Transition Problems”
Trump admitted Wednesday that there had been “transition problems” in the rollout of the tariffs, in a rare moment of Trump admitting that anything hadn’t gone exactly according to plan.
“There will always be transition difficulty – but in history, it was the biggest day in history, the markets. So we’re very, very happy with the way the country is running,” the president said, adding that he hopes a deal can be made on trade with China.
Insider Trading? New Legal Problems for Trump
Meanwhile, another aspect of Wednesday’s chain of events is continuing to draw attention.
A pair of Democratic Senators, including longtime Trump enemy Sen. Adam Schiff (D-CA) on Thursday called for an investigation into possible insider trading, in connection with a Truth Social post, by the president, on Wednesday morning, when Trump stated “THIS IS A GREAT TIME TO BUY.”
Trump would likely claim this was an effort to calm the markets at an uncertain time, but the theory is that Trump was signaling to allies that the tariffs reversal, the sort of thing likely to move markets upward, was on the way.
Schiff and Sen. Ruben Gallego (D-AZ) sent a letter to White House Chief of Staff Susie Wiles and U.S. Trade Representative Jamieson Greer asking for an investigation into possible conflicts of interest, per ABC News.
“This sequence of events raises grave legal and ethics concerns. The President, his family, and his advisors are uniquely positioned to be privy to and take advantage of non-public information to inform their investment decisions,” Schiff and Gallego wrote in their letter.
The senators asked the Office of Government Ethics to investigate whether anyone in the government was given advanced knowledge that the tariff switch was coming.
While members of Congress are often privy to information not available to the public, it is rare for insider trading cases to stick against them. Rep. Chris Collins (R-NY), in 2018, was convicted of insider trading and forced to resign after he was found to have called his son — from the White House grounds — and told him to sell stock. Collins was pardoned by Trump in 2020.
About the Author: Stephen Silver
Stephen Silver is an award-winning journalist, essayist and film critic, and contributor to the Philadelphia Inquirer, the Jewish Telegraphic Agency, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. For over a decade, Stephen has authored thousands of articles that focus on politics, technology, and the economy. Follow him on X (formerly Twitter) at @StephenSilver, and subscribe to his Substack newsletter.
