The excitement of its investors Wall Street Donald Trump’s second presidential term for the growth they believed would bring to the US economy, it would not last long.

After the November 4 elections in the US, the stock market index Report S&P 500 made a rally until 19 February, climbing to the level-level of 6,144 units. But then got downhill, Losing all the profits he had after the election and on Thursday he was moving to the six -month level. In just three weeks, it even entered the correction phase as it fell more than 10% of its high level.

The inverse course of the stock market began when Trump decided to implement his pre -election announcements to impose tariffs on imported products, with the aim of increasing investment in industry and employment in the US.

The problem with duties It is that they are leading to reciprocal measures from the affected countries, resulting in a trade war that ultimately makes exports and growth difficult for all countries. Historical experience, with a more striking example in the 1930s, has clearly shown that trade wars create more problems than they solve. In other words, everyone involved in them comes out.

In the US economy, some side effects have already begun Trump’s tariff policy But also from the front – back to their application. As China, Canada and the European Union have responded with duties to imports of American products, the climate for many businesses in America has become negative, as well as for consumers, who are afraid of new increase in inflation. A series of large banks, on the other hand, review their forecasts for the development of the American economy.

Wall Street is afraid of stagnationas can be seen from the fact that the only companies whose shares are positive, in a more general decline, are the energy and the utility that their revenue does not depend on the course of the economy.

US agricultural sector is narrowingAlso, from tariffs as it is difficult to export products, such as corn and soy, after China’s duties as retaliation to Trump’s horizontal duties (10% in February and an additional 10% in March). In addition, the cost of production for farmers is increased due to duties in fertilizer imports and other necessary inputs.

Despite the negative reaction of markets and many US companies to duties, Trump insists on them, having announced on April 2, on April 2, for all countries – supposedly on the basis of an absolute correspondence with those applied by each country to US products, but also to US products, but also duties. Already on Wednesday, US US duties have been implemented in steel and aluminum, regardless of their country of origin.

Wall Street investors, who bought shares believing that Trump would use tariffs more as a means of negotiation and not as a means of violent change in the US financial model, lost money. Those who believed that the US president would go back at the expense of the fall in the markets also seem, at least so far, have fallen out. Finance Minister Scott Bessed said the government is pursuing its policy on the course of the economy, not the fluctuations of the stock markets.

Trump acknowledged that there would be some “pain” in the economy in the short term and price increases, and did not initially rule out the possibility of recession, which he did later. His new doctrine is that “there is no pain without pain”, which implies that the US economy will reap the benefits of duties later. Given, however, the historical experience, and this seems doubtful. Some US companies may benefit from tariffs, such as in the steel industry, or increase them and others their productive base in the US, but overall the economy will suffer that can lead to corrective moves.