‘Can’t put the toothpaste back in the tube’
Global markets are rebounding on Tuesday even as trade tensions show little signs of cooling. To wit: Beijing vowed that it “will fight to the end” against President Trump’s latest tariff threats.
Wall Street analysts have issued a flurry of downgrades for the S&P 500, and billionaire business leaders are pushing back against Trump. (Among them is Elon Musk, the president’s biggest backer, who directly appealed to Trump to reverse course, The Washington Post reports.)
All this adds to a grim mood hanging over boardrooms and trading floors, with C.E.O.s and investors telling DealBook they worry that an irreversible new era for global business is at hand.
A major concern on both sides of the Atlantic: Trump’s sweeping tariffs won’t just dent global growth, but will also trigger a new era of protectionist policies that drive up inflation, sap corporate profits and chill investment — especially in the United States.
Some are asking whether Trump’s tariffs will reroute the daily trillion-dollar flows coursing through capital markets, much like when the coronavirus pandemic forced a worldwide rethinking of global supply chains. “This ‘can’t put the toothpaste back in the tube moment’ is real, if you ask me,” Joachim Klement, the head of strategy at the investment bank Panmure Liberum, told DealBook.
Even before the tariffs, investors were rethinking their approach to the U.S. For years, fund managers from around the world poured into U.S. stocks, a lucrative trade nicknamed “TINA,” short for “there is no alternative.” That trade has reversed dramatically since Election Day, with stocks in Asia and Europe outperforming their American counterparts. (That said, Jamie Dimon of JPMorgan Chase warned on Monday that stock prices “remain relatively high.”)
