TRUMP'S TARIFFS: WHEN WILL THE MARKET FORCE HIM TO BACK OFF?

Howard Lutnick, Trump’s special envoy for trade and economic affairs, said the U.S. president could cut tariffs on Canada and Mexico as early as Wednesday, sending the Canadian dollar and peso to daily highs. And U.S. stocks have continued to fall in recent days as the trade war unfolds.

Investors are wondering if there is a “Trump Level,” the point at which the president will waver and back down on his trade policies.

HOW TRUMP THINKS ABOUT THE MARKET One thing that Wall Street has learned in Trump’s first term is that the stock market is his personal metric for success. Everyone thought that since he was so fond of bragging about stocks, he would quickly change his mind and reverse course if the market took a big dip. But now that stocks have really fallen, professional investors are starting to question whether this famous “Trump Level” even exists.

WHAT THE EXPERTS SAY Tom Essay of The Sevens Report asks a simple question: “Where the heck is this level?” According to him, no one knows exactly what level of market “pain” will force Trump and his team to turn 180 degrees. “But if we look back to the first trade war, history suggests that Trump would flinch at about a 10% drop in the S&P 500.”

Nancy Tengler of Laffer Tengler Investments believes that we are now simply going through another market correction - painful as always. The S&P 500 is already down more than 5% from its record.

“Yes, it’s tariffs that are driving it right now,” she says. “But we need to look at not just the tariffs themselves, but how long they’re going to last. If this is a short-term story, then now is just a good time to buy stocks for the long term.”