Extract from ABC News
Analysis
In Trump's mind, America needs to return to the days when smokestacks dotted the countryside, but the country has moved on. (AP: Manuel Balce Ceneta)
AMP Economist says business and consumer confidence will suffer short-term hit
Outright panic hits spooked markets
A week ago, the US Federal Reserve of Atlanta estimated that even without the gold imports, America's economy could tip negative in the first quarter, down by around half a percentage point.
It has since revised those estimates. It now figures that, without the gold imports, the US economy is likely to have contracted by 1.7 per cent in the March quarter. Add in the gold imports and America's economy may have shrunk almost 4 per cent in the March quarter.
And that's even before the dramatic events of last Thursday, Trump's so called Liberation Day, which created outright panic in already spooked financial markets.
There's now growing fear that the combined impact of the financial markets rout and the devastating hit to the economy from the tariffs will cause a recession. Investment bank JP Morgan now places the odds of a full-blown US recession at 60 per cent.
Markets were already ripe for a correction. And the US economy was in serious need of a major renovation.
But the ham-fisted, amateur hour antics of the Trump administration have sent the globe down a dangerous path.
By opting for the wrecking ball, it threatens to expose fault lines we never knew existed in an extremely fragile, complex system of international inter-dependents. Remember the global financial crisis when a US housing market meltdown almost brought the world to its knees?
It took almost 80 years to build the global trading network Trump thinks is "ripping America off".
Can it be torn down in six weeks? Not without serious consequences which may include the ultimate demise of the American empire.
Treasurer Jim Chalmers addresses Trump tariffs and global market volatility
Aussie battler down for the count
The Aussie dollar is plunging.
As is usual with every episode of global turmoil, financial or otherwise, the Australian dollar has taken a beating.
Why us? Small we may be but when it comes to global trade, we are a major player in food, minerals and energy.
This time around, rather than a financial or health disruption, it is a full-blown trade crisis and the beating so far has been far more severe than usual.
If you listen to the popular press, you'll no doubt be assailed by reports that we've dropped below US60c, territory into which we rarely descend.
But the fall has been far worse as our currency plunge has been shielded by a US dollar that itself is dropping like a stone.
The Aussie has dropped close to 12 per cent against the euro and the yen in the past two months and 9 per cent against the pound.
The local dollar is one of the world's most volatile currencies because of its status as a trading nation currency and because we are often seen as a proxy for the health of China's economy.
It's not altogether negative. To a large extent, our currency acts like an economic shock absorber during periods such as this, making our exports automatically cheaper, which helps maintain our national income.
Of greater long-term concern is the sudden decline of the greenback.
Investment strategist says markets pricing in recession and lower corporate profits
Corporate America's rude awakening
US industry and investors big and small happily signed up for Trump 2.0.
The heady scent of American exceptionalism, from years of Wall Street's utter domination of financial markets and tech prowess, coupled with promises of lower tax and the wholesale removal of regulations was simply too intoxicating.
Market experts warn against 'knee-jerk reactions'Tech billionaires, whose companies had powered the Wall Street boom with the promise of an artificial intelligence revolution, dominated positions on the inauguration podium as Trump supporters lapped up the promises of a gilded future.
In just 12 weeks, those same billionaires have witnessed the wholesale destruction of a sizeable chunk of their personal fortunes. No-one has lost more than Elon Musk, the electric vehicle tycoon whose Tesla empire has seen its reputation trashed.
Almost $9 trillion was sliced from the value of US stocks last Thursday and Friday with possibly more to come this week as the tariffs threaten an inflation outbreak and a recession, the worst of all combinations.
But global investors haven't confined their selling to stocks. They're moving their cash out of America.
For decades, US government debt has been considered the benchmark for financial security. In times of trouble, investors, institutions and even nations have scrambled for the safe haven that is the world's biggest economy.
That crown has begun to slip and with it, the notion of a US dollar as the world's reserve currency.
While there is no country or currency to immediately replace it, Trump has damaged his country's standing and its reputation.
Economists spend their entire lives poring over mathematical models trying to predict the outcome of a policy shift or new economic system.
Ultimately, however, it is a futile endeavour. Economics is a study of behaviour. And economic performance ultimately rests on that most abstract of human of traits, emotion.
When it comes to business, as in life, trust and confidence are paramount.
As social animals, we need assurance that those beside us can be relied upon, even during the tough times, whether that be an individual, organisation or country.
Without trust, you suddenly find yourself swimming alone. Just ask Elon.
The other great economic rule is that, it's never about the level. It's always about the change. And the faster the change, the more potential for damage.
Recreating the glorious past? Or trashing the future?
It may be the world's largest economy, the global military superpower. But America is beset with problems.
More than half a century of trickle-down economics and laissez-faire policies have left it with extreme wealth and income imbalances, declining living standards and a rising death rate.
It runs massive financial imbalances at home and abroad via budget and trade deficits.
Market experts warn against 'knee-jerk reactions'Trump didn't create those problems. But not only did he fail to address them in his first term, he's masterfully used them to whip up internal dissent for political gain.
Now he's turned his attention offshore where his fixation on trade imbalances as a "rip-off" are at best naive and at worst dangerous.
You can't blame China because Americans want to buy their goods. And you can't blame Europeans because they don't fancy driving enormous American trucks down narrow cobblestone streets.
In Trump's mind, America needs to return to the days when smokestacks dotted the countryside. But America has moved on, into a high-tech future, which now could be threatened by Washington's determination to isolate itself from the rest of the world.
Even if those industries returned — which would be unlikely in the near future — would those new factories be replicas of that bygone era? Or would they be driven by robotics and powered with renewable energy?
Most business leaders assumed he was all bluster with the tariff threats this time around and now are aghast that he's actually implementing them.
Yet still, no-one is certain that this is all a tactical bluff to bludgeon other nations to the bargaining table or whether he is serious, which is shredding business and consumer confidence.
The longer that uncertainty prevails, the worse this situation could get.
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