"Trump's Tariff Storm: Chris Wood Warns of Economic Retreat, Not Revival"

Jefferies' Chris Wood calls April 2 "an impoverished day" and attacks Trump's massive additional tariffs. Amid a declining US currency and growing protectionism, analysts warn of global trade shocks,

Chris Wood, global head of equity strategy at Jefferies, views the move as a negative shift in U.S. trade policy, calling April 2 "an impoverishment day, not a liberation day" in his most recent GREED & fear report. U.S. President Donald Trump may have dubbed the day "Liberation Day" when he announced massive new tariffs.

"Tariff hikes are plain bad news, as the historic precedent of the Smoot-Hawley Tariff Act of 1930 highlights," Wood wrote. "This is an impoverishment day, not a liberation day, in our view.

" Trump marked what he called "Liberation Day" by announcing a dramatic overhaul of U.S. trade policy, including a uniform base tariff of 10% on all imports - a sharp jump from the pre-Trump 2.0 average of around 2.5%. The base rate will take effect on April 5.

In addition, the administration revealed a second layer of "reciprocal” tariffs targeting important trading partners. Asia sees some of the biggest hikes, with Cambodia being slammed with a 49% charge, Laos at 48%, and Vietnam at 46%. India will be subject to a 27% charge, while China's effective tax climbs to 54% when previously announced penalties are included. Key U.S. allies haven't been spared either, with Japan facing a 24% rate and the European Union 20%, but Canada and Mexico were exempted from the new penalties.

The tariffs are intended at correcting the U.S.'s expanding trade deficit, which presently stands at roughly $1.2 trillion the gap between the value of products imported and exported. But economists, like Wood, worry that the aggressive tariff stance risks provoking retaliatory steps and disrupting global supply networks.

Wood also pointed to an unexpected market reaction: “It is also quite noteworthy that the US dollar is dropping, which is the opposite of what the likes of Stephen Miran, chairman of the Council of Economic Advisers, would have expected."

Beyond the tariffs, Wood emphasized what he sees as a disturbing absence of internal economic constraint in the Trump administration. “It is becoming progressively more evident that the second Trump administration is missing a person on the economics to restrain some of Donald Trump's more extreme tendencies, most particularly when they are driven by the belief that trade is a zero-sum game," he said. He commended former Treasury Secretary Steven Mnuchin with having played that position effectively during Trump's first term.

Wood also labeled the imminent departure of Elon Musk from the government in late May a bad development, and maintained his belief that U.S. equity markets remain vulnerable. "GREED & fear's base case is that the chance of a waterfall decline in the U.S. stock market is rising," he wrote, noting not only lofty valuations but also "a panic unwind of passive investment when everybody holds the same stocks."

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