Why Trump’s Tariffs Might Be a Long-Term Win, Even After Crashing the Markets
If you’ve checked the news or your portfolio, you’ve probably seen the chaos. Markets tanked hard after President Trump rolled out his latest round of tariffs, with the S&P 500 dropping nearly 5% in a single day, the worst since the pandemic panic of 2020 & Bitcoin/Crypto didn’t fare much better. Investors are spooked, headlines are screaming about trade wars, and the word “recession” is now getting tossed around. But maybe this short-term pain is the price to win in the long-term. What if Trump’s tariff gamble, as wild as it seems right now, is actually the right move for America’s future? Trust me, as someone who voted for Trump that is heavily invested in crypto & stocks, I’m not happy at all but I’m trying to look at the ways these tariffs might be a win for us in the long-term.
The Immediate Hit: The Markets Crashed
Trump’s tariffs, slapping 25% on Canada and Mexico, 20% on China, and a 10% baseline on everyone else aren’t small potatoes. They hit major trading partners and cover a huge chunk of U.S. imports, from avocados to auto parts. Companies like Nike and Apple, with supply chains stretched across the globe, saw their stocks crater as investors priced in higher costs and slimmer margins. The fear? Tariffs jack up prices, squeeze consumers, and spark retaliation that chokes U.S. exports. Add in the uncertainty of wondering if Trump will eventually back off? Will other countries hit back harder? Take all that & you’ve got your recipe for a Wall Street meltdown. The numbers back this up. Goldman Sachs estimates every 5% hike in tariff rates could shave 1-2% off S&P 500 earnings. With these tariffs, we’re looking at a potential 2-3% earnings hit if they stick. No wonder the markets ran for the hills.
The Big Picture: Tariffs as a Reset Button
Trump’s argument and it’s one he’s been hammering since his first term is that tariffs can fix what’s broken in America’s trade game. The U.S. has been running massive trade deficits for decades, hitting over $1 trillion in 2023 alone. We buy way more than we sell, especially from places like China, and that cash bleed has hollowed out industries like manufacturing. Tariffs, in theory, flip the script: make foreign goods pricier, nudge consumers and companies to buy American, and bring jobs and factories back home. Take steel as an example. During Trump’s first term, his 25% tariffs on steel imports led to a bump in domestic production as U.S. steel output rose about 5% in 2019. Sure, it wasn’t a full-on industrial renaissance, but it showed the playbook can work. If these new, broader tariffs stick, they could juice up investment in a range of sectors like auto, tech & even agriculture over the next decade. The Tax Foundation pegs potential revenue from tariffs at $2.2 trillion over 10 years if they scale up. That’s cash the government could use to pay down our huge debt or fund infrastructure, both of which could stroke economic growth in America.
The Long Game
So, why might this be the right call despite the crash? Because it’s a bet on America’s future, not next quarter’s earnings. If tariffs spark a manufacturing revival, cut the trade deficit, and force fairer global trade, the U.S. could emerge stronger by the 2030s—less vulnerable, more self-sufficient, with a fatter industrial base. The market’s screaming now, but markets hate uncertainty more than reality. Once the tariffs’ effects shake out, hopefully we can look back and say, “Huh, that wasn’t a bad decison after all.” Trump himself shrugged off the market crash, saying, “The markets are going to boom” eventually. He might be onto something. History shows tariffs can hurt short-term but pay off long-term if they’re strategic. It has been messy so far, but it might just be the reset we need.