Take a look at the markets over the past few days, however, and you’ll get a very different message.
On Monday, the Standard & Poor’s 500-stock index plummeted more than 2 percent. It was the latest in a recent series of volatile days ending in severe losses for markets. Investors are digesting Trump’s trade-war rhetoric and Twitter-based corporate commentary and deciding that, actually, maybe now is not
the time to invest in the United States. Year to date, all three major stock indexes — the S&P 500, the Dow Jones industrial average and the tech-heavy Nasdaq — have taken negative turns.
Trump loves, loves, loves to brag about stock markets, which he (falsely) equates with economic health. And, initially, he did have something to brag about. Sort of.
His deficit-funded tax cuts were essentially a massive transfer of wealth from taxpayers to shareholders, driving profits and equities higher (though U.S. stocks were not, in fact, up more than stocks in the rest of the developed world since Trump took office). Deregulatory measures have likewise helped at least some companies cut costs and fatten profits.
But events of the past few months have taught investors a different lesson about how much stability and policy certainty Trump can offer firms doing business here.
In the past week alone, Trump has taken to Twitter four times to mount a confused series of attacks against Amazon.
His vendetta against the company has wiped out about
of wealth from its shareholders. Trump’s Amazon-bashing is clearly an extension of his media-bashing, given that Amazon’s founder and chief executive, Jeffrey P. Bezos, owns The Post. While The Post is an independent news organization — and not owned by Amazon — Trump seems to believe that the best way to strike back against coverage he dislikes is to mount a garbled critique of the retail giant that is the source of Bezos’s wealth, and to threaten regulatory retaliation against it.
This is hardly the first time Trump has turned to Twitter to attack a company he believes has wronged him. Last year, for example, he went after Nordstrom
when it dropped his daughter Ivanka’s apparel line. Those tweets also initially sent Nordstrom’s share price downward.
Let’s pause for a moment to ponder how crazy it is for a sitting president to actively push down the stock prices of perceived political enemies. This is the very definition of “choosing winners and losers,” something Republicans have long excoriated Democrats for doing. But in this case, it is a version usually practiced not by misguided ideologues but by tin-pot dictators: that is, those who leverage the power of the state to reward companies that praise the leader and to punish those that don’t.
All of these are not exactly developments that lend themselves to a thriving, healthy investment environment.
“When businesspeople spend more time thinking about flattering the leader and less about serving their customers, there are fewer and worse jobs available, less wealth, less stability,”
the New Yorker’s Adam Davidson, who has spent time reporting from many of the countries where firms know that the most successful business model is political sycophancy.
But this is hardly the only way Trump’s actions have been weighing on stock markets recently. There’s also, you know, that pesky risk of a trade war. Or rather, trade wars, plural.
Over the weekend, Trump tweeted renewed threats to tear up the North American Free Trade Agreement
. And China announced it would levy about $3 billion worth of tariffs on 128 U.S. products — including pork, fruit and ethanol — designed to match the steel and aluminum tariffs the president first announced in early March.
Much bigger tariffs may be coming, too, if China elects to target even larger and more politically sensitive U.S. exports to China, such as soybeans. Beijing is likely keeping this bazooka in its back pocket as the Trump administration prepares a separate list of additional
tariffs, which Trump has said would be worth about $60 billion.
markets are skittish, to say the least, about such reckless, shortsighted trade policy. And such reckless, shortsighted tweets. And such reckless, shortsighted favor-trading.
Yes, Trump’s America may be open for business. But would anyone be surprised if investors started shopping around?