How Have Tariffs Affected Stock Markets Historically?

 

How Have Tariffs Affected Stock Markets Historically?

Tariffs are trade barriers that governments impose on imports to protect domestic industries. However, history shows they often lead to market instability, economic downturns, and retaliatory measures from other countries. Here’s how tariffs have impacted the stock market in key historical events:

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1. The Smoot-Hawley Tariff Act (1930) – Worsened the Great Depression

What Happened?

• The U.S. raised tariffs on over 20,000 imported goods to protect domestic industries.
• Countries like Canada, France, and Britain retaliated with their own tariffs.
• Global trade collapsed by 65% between 1929 and 1934.
• U.S. businesses that relied on exports suffered, leading to more layoffs and bankruptcies.

Stock Market Impact:

• After Smoot-Hawley passed, the Dow Jones fell another 40% in 1930.
• By 1932, stocks had lost 90% of their value from their 1929 peak.

Lesson:

• Protectionist policies during economic downturns exacerbate recessions instead of fixing them.
• The U.S. and other countries eventually reversed tariffs to restart trade.

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2. Reagan’s Tariffs on Japan (1980s) – Mixed Market Impact

What Happened?

• The U.S. imposed tariffs and import quotas on Japanese cars, semiconductors, and steel.
• Japan agreed to "voluntary export restraints" on car exports.

Stock Market Impact:

• Unlike in the 1930s, the U.S. economy was strong, so the stock market continued to rise through the 1980s.
• However, Japan’s stock market boomed artificially, then crashed in 1990.

Lesson:

• Tariffs can temporarily boost domestic industries but distort markets and lead to bubbles.

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3. Trump’s Trade War with China (2018-2019) – Increased Volatility

What Happened?

• The U.S. imposed tariffs on $360 billion worth of Chinese goods, focusing on tech and manufacturing.
• China retaliated with tariffs on $110 billion in U.S. goods, hitting farmers and tech companies.

Stock Market Impact:

• The S&P 500 fell 20% in late 2018 due to trade war fears.
• However, Fed interest rate cuts in 2019 reversed the market decline.
• Long-term effects hurt supply chains and raised costs for U.S. businesses.

Lesson:

• Short-term pain: Stock markets react negatively to tariffs due to fears of a slowdown.
• Long-term adaptation: Companies relocate supply chains, but uncertainty increases volatility.

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4. Biden & Trump’s Tariffs (2024-2025) – Current Risks

What’s Happening Now?

• Trump’s new 2025 tariffs on Canada, Mexico, and China are sparking concerns of another trade war.
• If countries retaliate, industries like tech, autos, and agriculture could suffer.

Stock Market Impact (So Far):

• The Dow Jones fell 1.5% on March 3, 2025.
• Nvidia lost nearly 9%, showing tech stocks are vulnerable.

Potential Future Outcomes:

• If tariffs expand, markets may drop further.
• If tariffs are negotiated away, markets could rebound.
• The Fed’s response (rate cuts or stimulus) will determine the long-term outcome.

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Final Takeaways:

• Short-term: Tariffs create stock market volatility as businesses adjust.
• Long-term: Trade wars tend to reduce economic growth and stock returns.
• Policy Matters: Governments reversing or modifying tariffs can stabilize markets.

The Fall of the Wall of Shame, Heroes, 1989 & more

"Un 9 de noviembre pero de 1989 se derribó el Muro de Berlín, que dividía a Alemania en dos países"





I, I can remember (I remember)
Standing, by the wall (by the wall)
And the guns, shot above our heads (over our heads)
And we kissed, as though nothing could fall (nothing could fall)
And the shame, was on the other side
Oh, we can beat them, forever and ever
Then we could be heroes, just for one day

We can be heroes
We can be heroes
We can be heroes
Just for one day
We can be heroes

We're nothing, and nothing will help us
Maybe we're lying, then you better not stay
But we could be safer, just for one day
Oh-oh-oh-ohh, oh-oh-oh-ohh, just for one day











I can't embed this but you should watch

The Berlin Wall Falls 1989 NBC Coverage Pt1
https://www.youtube.com/watch?v=fK1MwhEDjHg


The Berlin Wall Falls 1989 NBC Coverage Pt2
https://www.youtube.com/watch?v=y-9_uQx6IsQ






Interesting facts about 1989
(things to recall and teach your kids)
https://en.wikipedia.org/wiki/1989


January 24 – Florida executes Ted Bundy by electric chair for the murders of young women.

February 14

• Union Carbide agrees to pay US$470 million to the Indian government for damages in the 1984 Bhopal disaster.

• March 13
  • A geomagnetic storm causes the collapse of the Hydro-Québec power grid. Six million people are left without power for 9 hours. Some areas in the northeastern U.S. and in Sweden also lose power, and aurorae are seen as far as Texas.
  • Tim Berners-Lee produces the proposal document that will become the blueprint for the World Wide Web.^[7]

• May 1
  • Andrés Rodríguez, who had seized power and declared himself President of Paraguay during a military coup in February, wins a landslide election in a general election marked by charges of fraud.
  • Disney-MGM Studios at Walt Disney World opens to the public for the first time.

June 5 – An unknown Chinese protestor, "Tank Man", stands in front of a column of military tanks on Chang'an Avenue in Beijing, temporarily halting them, an incident which achieves iconic status internationally through images taken by Western photographers.

• July 5
  • President of South Africa P. W. Botha meets the imprisoned Nelson Mandela face to face for the first time.
  • The television show Seinfeld premieres.

August 23

• Singing Revolution: Two million indigenous people of Estonian, Latvian and Lithuanian SSRs join hands to demand freedom and independence from Soviet occupation, forming an uninterrupted 600 km human chain called the Baltic Way.
• Hungary removes border restrictions with Austria.

August 25 – Voyager 2 passes the planet Neptune and its moon Triton.

October 5 – The Dalai Lama wins the Nobel Peace Prize.

October 13

• Friday the 13th mini-crash: The Dow Jones Industrial Average plunges 190.58 points, or 6.91 percent, to close at 2,569.26, most likely after the junk bond market collapses.

November 9

• Cold War and Fall of the Berlin Wall: Günter Schabowski accidentally states in a live broadcast press conference that new rules for traveling from East Germany to West Germany will be put in effect "immediately". East Germany opens checkpoints in the Berlin Wall, allowing its citizens to travel freely to West Germany for the first time in decades (November 17 celebrates Germans tearing the wall down).

 November – First commercial dial-up Internet connection in North America is made, by The World STD.^[20]

• November – The first Walmart store in the Northeastern United States, a Sam's Club, is opened in Delran, New Jersey.^[21]

https://en.wikipedia.org/wiki/Berlin_Wall

 From Wikipedia
The Berlin Wall (German: Berliner Mauer) was a barrier that divided Berlin from 1961 to 1989.^[1] Constructed by the German Democratic Republic (GDR, East Germany), starting on 13 August 1961, the Wall completely cut off (by land) West Berlin from surrounding East Germany and from East Berlin until government officials opened it in November 1989.^[2] Its demolition officially began on 13 June 1990 and was completed in 1992.^[3] The barrier included guard towers placed along large concrete walls,^[4] which circumscribed a wide area (later known as the "death strip") that contained anti-vehicle trenches, "fakir beds" and other defenses. The Eastern Bloc claimed that the Wall was erected to protect its population from fascist elements conspiring to prevent the "will of the people" in building a socialist state in East Germany. In practice, the Wall served to prevent the massive emigration and defection that had marked East Germany and the communist Eastern Bloc during the post-World War II period.

The Berlin Wall was officially referred to as the "Anti-Fascist Protective Wall" (German: Antifaschistischer Schutzwall) by GDR authorities, implying that the NATO countries and West Germany in particular were considered equal to "fascists"^[5] by GDR propaganda. The West Berlin city government sometimes referred to it as the "Wall of Shame"—a term coined by mayor Willy Brandt—while condemning the Wall's restriction on freedom of movement. Along with the separate and much longer Inner German border (IGB), which demarcated the border between East and West Germany, it came to symbolize a physical marker of the "Iron Curtain" that separated Western Europe and the Eastern Bloc during the Cold War.

Powerful Words- Powerful Women- Poetry in MOTION!!

3 Girls Perform 'Somewhere In America'
3 girls went on national television and raised the bar for America. Fearless...
Posted by Omeleto on Thursday, January 7, 2016

THE POWER OF SPOKEN WORD SPEAKING TRUTH BY YOUTH!

Dr.Suess knows best!!

Here's an old favourite!!

These Youth Are Awake, Are You?

Well Spoken!! Something we all need to hear!