As of Wednesday, Apr. 9, President Donald Trump has hit pause on his global tariff agenda after the stock market lost almost $10 trillion in the time since he took office. 

Five trillion of that was lost between Apr. 2 and Apr. 4, coinciding with the implementation of Trump’s reciprocal tariffs on Apr. 2.

Shortly after Trump had reversed course on the reciprocal tariffs, I sat down with Distinguished Professor Ilene Grabel of the Korbel School of International Studies to discuss the current state of the global economy, President Trump’s tariffs policy and how those tariffs are affecting stock markets. 

Grabel is the co-director of the Graduate Program in Global Economic Affairs at DU and has extensive expertise on international trade and the impacts of tariff policies.  

As the world saw last week, stock markets often react negatively to tariffs. Grabel said this is because of uncertainty. When Trump imposes tariffs, no one knows when they will be imposed and against whom. Furthermore, Grabel explained that Trump’s decision-making often appear to be ad hoc in nature and lack clear communication or coordination with economic advisors.

“Investors hate uncertainty,” Grabel noted. “It makes it impossible to plan for the future.” 

Tariffs can also contribute to rising inflation and lead to higher unemployment. 

“Tariffs have really unambiguous negative effects on the U.S. economy and on the global economy,” said Grabel. 

This leads to investors becoming pessimistic about the future and deciding to sell off their holdings to avoid further losses. 

“Everyday people,” however, were not the only ones who watched their portfolios shrink last week in response to the tariffs.

Businesses and major corporations also suffered, watching billions in value vanish almost overnight as markets reacted to the chaos. Prominent business leaders who attended Trump’s inauguration, like Jeff Bezos, lost $23 billion between April 10 and 11. 

Grabel said that business leaders, like Bezos, were not originally fans of Trump because they were worried about tariffs. It was not until after he won the presidency that those same players shifted sides. 

It is hard to say if those same business leaders voiced their concerns directly to the president about the tariffs, but we do know that their reaction to the policy was overwhelmingly negative.

It wasn’t just CEOs who spoke out against the tariffs last week — tensions were also beginning to brew within the Republican Party, with a handful of Republican senators joining Democrats to pass a bill that would give Congress more power over the implementation of tariffs. 

“I would be very surprised if there has not been intense pressure on the President and the President’s economy coming from within the Republican Party. The Trump Administration does not want to be responsible for crashing the U.S. economy, causing a financial crisis and perhaps a global financial crisis,” said Grabel.

While the Trump Administration recently announced a 90-day pause on the tariffs for negotiation purposes, China’s remain in effect. Currently, the U.S. is imposing a 145% tariff on goods imported from China. In return, China has announced that it is raising the tariff on U.S. goods from 84% to 125%. 

Grabel said that “U.S. [and] China economic relations are at the worst point that they’ve ever been in history,” and that the leaders of both countries appear to be risking their respective economies in an effort not to back down. 

According to Grabel, the current economic strategy of the United States appears to be encouraging China to wean itself off economic reliance on the U.S. “I think the biggest winner from the tariff war that President Trump has started is China. Because, while the U.S. walls itself off from the global economy, the Chinese government has every incentive to restructure its economy,” she said.

Grabel said the same phenomenon could be happening with other countries like Russia, which have long held plans for “de-dollarization.” 

It’s impossible to know whether the Trump administration will resume the tariffs at the end of the 90 days, or what the future with China will look like. 

“[It’s] the most unpredictable [U.S.] administration that this country has ever had,” Grabel remarked.