Trump’s Ambitious 90-Day Goal: Can 150 Trade Deals Restore Investor Confidence? | CNN Business

President Donald Trump’s trade policies have created a whirlwind of uncertainty. His original strategy aimed to scare other nations into negotiating trade deals by announcing high tariffs. However, the 90-day halt on these tariffs leaves his administration with only three months to tackle complex agreements with numerous countries.

Financial markets are not convinced. Stocks have shown erratic behavior as fears about the potential fallout from Trump’s tariffs linger. After a steep decline, the Dow Jones Industrial Average fell by over 260 points, reflecting a 0.65% drop. The S&P 500 and Nasdaq also faced losses. Investors are on edge, reacting sharply to any news from Trump’s team regarding tariffs. For instance, when the administration revealed that the proposed tariff rate on China was actually 145% instead of the expected 125%, the Dow plummeted more than 2,000 points at one moment.

In a brief moment of calm, stocks appeared steadier, but they remain below the levels seen before what Trump called his “Liberation Day” plan. Historically, fluctuations in the stock market are common, but compared to the 129-year history of the Dow, such drastic swings have been rare. In fact, the Dow has only closed up or down by 1,000 points or more just 31 times in its history, with four of those instances occurring recently.

Amid this turmoil, the bond market is behaving unexpectedly. Normally, you’d expect bond prices to rise during uncertain times as investors flock to safety. However, prices are falling. This drop signals a lack of confidence in U.S. trade policy. JPMorgan Chase CEO Jamie Dimon pointed out that an “America First” approach could hurt relationships with crucial trading partners.

Bond yields, which move opposite to prices, have surged to around 4.4%, up from below 4% earlier in the week. This increase might negatively impact consumer loans, as they often tie to these rates.

The oil market is also showing signs of stress. Oil prices have dipped significantly, reflecting concerns that reduced demand for travel and transportation due to Trump’s trade policies could lead to less need for fuel. U.S. oil prices are nearing four-year lows, hovering around $60 a barrel.

Interestingly, the U.S. dollar has weakened, dropping to its lowest value in three years. Usually, tariffs would boost a local currency’s value, but traders are skeptical that the U.S. economy can withstand the consequences of ongoing trade conflicts. The dollar index, which measures the strength of the dollar against a basket of currencies, has also seen a significant decline.

Joe Brusuelas, the chief economist at RSM, noted that the loss of confidence in American assets has led both investors and central banks to sell off Treasuries and the dollar. “Financial chaos has its cost,” he remarked.

Despite these challenges, the Trump administration remains hopeful. Treasury Secretary Scott Bessent claimed that over 70 countries are eager to negotiate deals with the U.S. However, reaching these agreements takes time. Trade deals are intricate and typically cannot be finalized in just a few months.

The ongoing confrontation with China complicates matters further. With a current 145% tariff on U.S. imports, China retaliated with its own 125% tariffs, straining relations between the two largest economies. China has expressed that it is open to talks, but its insistence on mutual respect in negotiations remains firm.

Economists remain skeptical of Trump’s shift towards pursuing trade agreements. Even if negotiations bear fruit, much damage is already done. The intertwining of tariffs on a range of goods may leave both the U.S. and global economies in a precarious position. Major banks like JPMorgan and Goldman Sachs indicate that the chances of a recession this year stand at nearly fifty-fifty.

In the world of finance, the landscape is continually shifting. As Trump navigates these complex waters, the outcome remains uncertain, but the ripple effects of his policies are unmistakable. For more detailed analysis of the current economic climate, check out CNN’s latest insights.

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