I am trying to find the words to describe the economic carnage that we are witnessing right now. Even before President Trump unveiled his new tariffs, the U.S. economy was rapidly heading in the wrong direction, layoffs were soaring, and stock prices were steadily falling. But now it is as if enormous amounts of gasoline have been suddenly poured on the fire. Trump’s tariffs have caused a massive wave of panic on Wall Street, and the Dow Jones Industrial Average was down 1,679 points on Thursday. That was the biggest decline that we have seen since the early days of the pandemic in 2020. The S&P 500 and the Nasdaq also experienced the largest declines that we have seen since 2020. Everywhere you look there is carnage. The small-cap Russell 2000 index has now fallen more than 20 percent from the peak, and that officially puts it in bear market territory. What we are witnessing is absolutely horrifying.
The reason why there is so much fear is because U.S. tariff rates will now be even higher than they were during the early days of the Great Depression…
Trump’s aggressive tariff moves are set to lift the US tariffs rate from just 2.5% last year to 22%, according to Fitch.
That surpasses the roughly 20% tariff rate the United States charged following the infamous Smoot-Hawley Tariff Act of 1930, which set off a global trade war that economists say worsened the Great Depression.
Our system is not designed to handle a shock like this.
We needed to address our trade imbalances with a scalpel, not a sledgehammer.
The European Union is already telling us that they will retaliate with new tariffs of their own…
The European Union has condemned Donald Trump’s sweeping tariffs as ‘a major blow to the world economy’, with world leaders going on the defensive as they digest what the bombshell measures will mean for global trade.
‘There seems to be no order in the disorder. No clear path through the complexity and chaos that is being created as all US trading partners are hit,’ European Commission President Ursula von der Leyen said.
Responding to the 20 percent tariffs on EU exports to the United States, she said Brussels was ‘finalising a first package of countermeasures’ and preparing to implement more.
And the Chinese are warning that they will be implementing “countermeasures”…
Nikkei Asia quoted China’s Ministry of Commerce, warning that it “firmly opposes” Trump’s tariffs and “will resolutely take countermeasures to safeguard its own rights and interests.”
The Commerce Ministry noted that the US “ignored” the benefits of a global trading system, adding, “The so-called ‘reciprocal tariffs,’ which are based on subjective and unilateral assessments by the United States, are not in line with the rules of international trade, seriously jeopardize the legitimate rights and interests of the parties concerned, and are typical of unilateral bullying.”
Our relations with China have been on a downhill trajectory for a long time, and now Chinese officials are absolutely furious.
They know that their economy is going to get hit extremely hard by these tariffs.
In fact, pretty much all major Asian economies will get hit extremely hard by these tariffs…
“Asian economies will be hit harder than most by U.S. reciprocal tariffs,” said Marcel Thieliant, head of Asia-Pacific at Capital Economics. “Not only do Asian economies face higher tariffs than many others, they are also more dependent on U.S. goods demand than most.”
I have written much about how dependent we have become on imports from China.
But the truth is that we have also become highly dependent on imports from other Asian nations as well.
For example, the new 46 percent tariff on goods from Vietnam will be extremely painful for U.S. consumers, because we import vast amounts of clothing, toys, furniture and shoes from that country.
In fact, almost one-third of all footwear imports “came from Vietnam in 2023”…
Nike shares dropped nearly 12% in afternoon trading Thursday. Adidas and other major footwear players also rely heavily on Vietnam.
Adidas said it will evaluate the tariffs and monitor how they will affect its business. Nike did not immediately respond to CNBC’s request for comment.
Nearly a third of footwear imports in the U.S. came from Vietnam in 2023, the most recent full-year data available, according to the Footwear Distributors and Retailers of America, an industry trade group.
The era of cheap shoes is ending.
Of course the exact same thing could be said about countless other product categories.
Peter Baum, the chief operating officer of Baum Essex, is warning that this “is how you start a global depression”…
Peter Baum is the chief financial officer and chief operating officer of Baum Essex, a New York-based manufacturer with licenses to make products for brands like Nautica, Betsey Johnson and Steve Madden. During the first Trump administration in 2019, Baum moved factories from from China to the Philippines, Cambodia, Vietnam and India.
He told CNBC on Wednesday that the reciprocal tariffs would do massive damage to his company.
“This is how you start a global depression. After 80 years and five generations Trump just put us out of business,” Baum said.
As I discussed yesterday, we haven’t seen an economic event of this magnitude in a long time.
Analysts at JPMorgan are warning that we are facing “a substantial macro economic shock” and that U.S. consumers should brace themselves for substantially higher prices…
JPMorgan noted that the tariffs would hike taxes on Americans by $660 billion a year — the largest tax increase in recent memory by a longshot. It will cause prices to surge, too, adding 2% to the Consumer Price Index, a measure of US inflation that has struggled to come back down to earth in recent years.
“The impact on inflation will be substantial,” the analysts said. “We view the full implementation of these policies as a substantial macro economic shock.”
As this economic shock reverberates throughout the U.S. economy, large numbers of people are going to lose their jobs.
Of course this is already happening.
According to Challenger, Gray & Christmas, layoffs in the U.S. were 205 percent higher in March 2025 than they were in March 2024…
Layoffs across the U.S. surged 205% in March when compared with a year earlier, with last month’s 275,240 job cuts fueled by widespread firings engineered by billionaire Elon Musk’s Department of Government Efficiency, or DOGE, according to outplacement firm Challenger, Gray & Christmas.
March’s layoffs represent the third-highest monthly total ever recorded, Challenger said. The two previous highest monthly totals were recorded in April 2020 and May 2020, when more than 671,000 and 397,000 job cuts, respectively, were recorded, due to the pandemic shuttering the U.S. economy, according to its data.
Read that last paragraph again.
The only time we have seen worse months was during the early days of the pandemic in 2020.
And now the extreme disruption caused by the new tariffs will inevitably result in even more layoffs. In fact, Stellantis immediately announced a wave of layoffs following the unveiling of the new tariffs…
Stellantis has “paused production” at some of its Canadian and Mexican auto assembly plants due to the newly announced tariffs — and as a result, some US workers will also be temporarily laid off.
Among those to be laid off are 900 US hourly employees who make powertrains and stampings that supply the affected Canadian and Mexican plants, Stellantis said Thursday. The temporary layoffs are due to reduced production prompted by the tariffs.
We are going to witness such a dramatic shift in the auto industry.
Trump is imposing a 25 percent tariff on all vehicles imported into the United States, and this is going to instantly make imported vehicles much more expensive…
President Donald Trump’s 25% tariffs on imported vehicles to the U.S. have taken effect, but the impacts of the new levies on investors and the global automotive industry will play out over the months, if not years, to come.
The 25% tariffs are on any vehicle not assembled in the U.S., which S&P Global Mobility reports accounted for 46% of the roughly 16 million vehicles sold domestically last year. The White House has said it also plans to place tariffs on some auto parts such as engines and transmissions, but those are set to take effect no later than May 3.
The global economy was already slowing down significantly.
A disruption of this magnitude threatens to throw it into a state of complete and utter chaos.
We haven’t seen anything like this since the Great Depression of the 1930s, and that should deeply alarm all of us.
Michael’s new book entitled “Why” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.
About the Author: Michael Snyder’s new book entitled “Why” is available in paperback and for the Kindle on Amazon.com. He has also written eight other books that are available on Amazon.com including “Chaos”, “End Times”, “7 Year Apocalypse”, “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, and “Living A Life That Really Matters”. When you purchase any of Michael’s books you help to support the work that he is doing. You can also get his articles by email as soon as he publishes them by subscribing to his Substack newsletter. Michael has published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and he always freely and happily allows others to republish those articles on their own websites. These are such troubled times, and people need hope. John 3:16 tells us about the hope that God has given us through Jesus Christ: “For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.” If you have not already done so, we strongly urge you to invite Jesus Christ to be your Lord and Savior today.