Trump’s Tariff Strategy and Its Market Impact

Economist Alex Krüger suggests President Donald Trump’s upcoming tariffs will significantly influence market directions.

Trump declares April 2nd as “Liberation Day in America,” when tariffs will be imposed globally. However, mixed signals from the Trump Administration raise uncertainty about the tariffs’ severity.

Krüger, addressing his 208,500 followers on X, describes the date’s potential market impact as akin to election night, affecting both traditional and crypto markets. He elaborates:

> “It is the biggest event of the year by an order of magnitude. 10x more important than any FOMC, which is a lot. And anything can happen.”

He outlines possible scenarios:
– Soft Approach: If Trump goes easy, markets may rally sharply.
– Moderate Approach: If mixed messages arise, uncertainty could lead to volatility, pushing stop losses.
– Hard Approach: A full-blown tariff might result in a rapid market crash of 10% to 15%.

Krüger notes that in a worst-case outcome, tariff removals could lead to deteriorating conditions around Tax Day.

While the US economy remains robust, a slowdown due to tariffs is anticipated. Most economists have already factored in a sharp economic downturn by year-end.