Will Trump Tariff Turmoil Dim The Economy's Lights?

The stock market was whipsawed today by geopolitical developments. Stocks fell this morning when President Donald Trump announced a 50% tariff on Canadian steel and aluminum. They then recovered after Ukraine agreed to a US-proposed ceasefire deal (pending Russia's acceptance). Incremental progress on a tariff-avoiding deal between the US and Canada late in the day provided an additional boost. But stock prices still closed down a bit for the day.

Investors are worrying about the adverse macroeconomic consequences of all this geopolitical turmoil. The uncertainty associated with rapid-fire tariff announcements from the White House could weigh on the economy. The NFIB survey of small business owners includes an uncertainty index, which rose to a new record high of 110 during October (chart). After the November 5 elections, it fell down to 86 in December and then rebounded to 104 in February.