A red wall on Wall Street.
The Dow lost more than 2,000 points in a single day – that’s only happened three times before in its long history.
The Nasdaq closed in Bear Market – the opposite of Bull Market – reflecting a 20% drop from a recent high.
The Dow, Nasdaq and S&P500 Index all recorded their worst week since the global pandemic five years ago.
That’s what happens when the world’s two largest economies – America and China – declare a trade war.
Other countries are still debating retaliating for Mr Trump’s tariffs – “there will be blood”, according to one Wall Street bank.
As China hit back, the US president hit the golf course, defending his attempt to bring down the trade deficit and bring back manufacturing.
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“China,” he posted online, “are not very happy about our reciprocal tariffs. Necessary for fair and balanced trade between China and the USA.”
“This proves that tariffs are the most powerful economic tool and very important to our national security!” he added.
But the chair of the Federal Reserve, the man tasked with keeping US inflation in check, struck a much more sombre tone.
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Jerome Powell said: “It is now becoming clear that tariff increases will be significantly larger than expected, and the same is likely to be true of the economic effects.”
“While tariffs are highly likely to generate at least a temporary rise in inflation, it’s also possible that the effects could be more persistent,” he warned.
That’s bad news for American consumers, who’ve benefitted from an open market.
With free trade, America lost manufacturing jobs but gained cheap products from places like China.
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Read more:
Trump’s tariffs will have an impact before too long
Global markets have given Trump a clear no-confidence vote
The president’s determination to bring back those manufacturing jobs signals the end of those reduced prices.
One mother, shopping on the outskirts of Washington DC, told me she was “extremely worried about prices going up”.
She said: “It’s affecting our families here in America, so yes, I’m very worried about that.”
Asked if she thought the government was making a mistake, she replied: “I do.”
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Her message for the president: “Stop it.”
He doesn’t appear to have his head in the sand. He appears to believe it will all work out in the end.
And the man who’s driven by the words on his red hat – ‘Make America Great Again’ – seems undeterred by the red wall on Wall Street.
