Renowned economist Peter Schiff has delivered a scathing assessment of President Donald Trump‘s recent tariff policy, comparing the rollout and the subsequent pause to the catastrophic failure of the 1937 Hindenburg airship disaster.
What Happened: In a post on X post, Schiff argued that Trump's aggressive tariff threats have backfired, exposing vulnerabilities in the U.S. economy and diminishing his negotiating power on the global stage.
Schiff’s critique highlights the potential consequences of Trump’s aggressive trade tactics. By implementing sweeping tariffs and then abruptly pausing them, Trump may have signaled to trading partners that his threats are not as credible as initially perceived. This perceived weakness could undermine his negotiating position in future trade talks.
“Trump reduced himself to a paper tiger,” added Schiff.
He characterized Trump's tariff rollout as highly flawed, likening it to the "Hindenburg of trial balloons" — a metaphor referencing the 1937 airship disaster that marked a dramatic and tragic end to an era.
Why It Matters: The U.S. stock market recovered on Wednesday after Trump paused the tariffs, with the S&P 500 logging its largest single-day gain since 2008. It was also the S&P 500’s third-biggest one-day gain since 1950.
Bill Ackman, billionaire investor and Pershing Square CEO, applauded President Trump’s 90-day tariff pause for non-retaliating nations, while Trump simultaneously increased tariffs on China to 125%. Ackman expressed his gratitude on X, particularly praising Treasury Secretary Scott Bessent.
Ray Dalio, the billionaire founder of Bridgewater Associates, lauded Trump’s pivot towards trade negotiations over escalating tensions as “a much better way” in an X post. He urged the President to secure a deal with China and lower the fiscal deficit to 3% of GDP, suggesting a strategy involving RMB appreciation against the dollar via China selling dollar assets and easing its economic policies to boost demand.
Notably, the Nasdaq 100 rose to exit the bear territory and was down 13.85% from its previous record of 22,222.61 points. The S&P 500 was still in the correction zone, down 11.23% from its last high of 6,147.43 points. Whereas Dow Jones was 9.91% lower than its 52-week high of 45,073.63 points.
Price Action: The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, were lower in premarket on Thursday. The SPY was down 2.75% to $533.51, while the QQQ declined 2.49% to $454.41, while the QQQ declined 1.81% to $457.56, according to Benzinga Pro data.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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