The reckoning has arrived, April 2, 2025, will be known in time as D-Day (Devastation Day), the day in which the United States embarked on a bold and sloppily executed tariff policy, shocking capital markets, investors and average citizens. At the time of writing, the S&P500 closed toward the lows of the session and has now lost 17.38% from its peak on February 19, 2025 with the Nasdaq losing 21.58%. To be clear, where we go from here will be entirely dependent on how fast we see policy backtrack from the United States President, action from congress in cancelling these tariffs, or trade negotiations with our global trading partners that walk tariff rates back down toward levels that will be more digestible, or gradual. We believe that this will not be a process that works itself out in days, but will take weeks or months, and will see further volatility arise in markets. On March 17, our piece Risks, Reckoning and Resiliency, argued that markets were not merely digesting inflation or valuations but were confronting the structural repricing of risk in a world defined by deteriorating governance, fractured trade flows, and policy volatility. Trump’s “Liberation Day” tariff initiative marks the next evolution of that thesis.

This isn’t protectionism, it’s not defending the American Dream, it’s system shock and should this policy remain in place past a quarter, it will be economic Armageddon. 

The announced reciprocal tariff mechanism aims to “equalize trade asymmetries,” but the formula is simplistic and the delivery mechanism highly incendiary for growth. Markets are waking up to the cost of economic imperialism masquerading as strategy. The macro narrative has also shifted: this isn’t about inflation anymore, this is about imposed entropy, with many economists wondering if there was any plan at all.