The Stock Market Flashes a Warning as President Trump Announces New Tariffs The S&P 500 has remained range-bound this year, while global markets outside the U.S. have advanced by nearly 10%. According to Charles Schwab strategist Kevin Gordon, this underperformance has not occurred at such a scale in over three decades. The disparity reflects investor concerns over U.S. economic conditions and President Trump’s trade policies, which have increasingly shifted focus toward tariffs. Trump’s recent actions have replaced previously invalidated tariffs under the International Emergency Economic Powers Act (IEEPA) with new duties under Section 122 of the Trade Act of 1974. Last year, the Supreme Court ruled that IEEPA tariffs were unconstitutional, prompting Trump to impose a 10% global tariff, later raised to 15%. The Budget Lab at Yale estimates that the average tax on U.S. imports dropped from 16% to 13.7% following the ruling. While Section 122 tariffs expire after 150 days unless extended by Congress, they provide Trump with time to pursue more permanent measures under Section 301, which requires detailed investigations. Economic data suggests Trump’s tariffs have already begun to weigh on growth. Studies by the Congressional Budget Office (CBO), Federal Reserve Bank of New York, Kiel Institute, and National Bureau of Economic Research indicate that U.S. businesses and consumers have borne the majority of the tariff costs, with estimates around 90% of the burden. This means the government collects funds that could otherwise stimulate the economy, leading to slower GDP growth. In 2025, the U.S. added only 181,000 jobs—the lowest non-pandemic figure since 2009—and economic expansion slowed to 2.2%, the weakest non-pandemic growth in a decade.#president_trump #congressional_budget_office #federal_reserve_bank_of_new_york #kiel_institute #national_bureau_of_economic_research
