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The world economy is reeling today as businesses and investors try to unpack Donald Trump’s so-called “reciprocal tariffs.”
Trump aims to curb the United States’ reliance on foreign goods by raising the import cost for different countries, which is throwing the US-dominated global supply chain into chaos. Wall Street is in shambles as a result, with some $5 trillion in market value being wiped out in the past two days — the worst performance for the S&P 500 since the pandemic shock of 2020.
Tech stocks were hammered especially hard after China announced its own tariffs of 34 percent in response to Trump’s moves, thanks to their dependence on Chinese minerals and labor. And of all the tech companies bleeding out on the Stock Exchange floor, Tesla is in particularly rough shape.
Elon Musk’s EV company posted losses for ten of the last 11 weeks, and this one was no different. On Friday, Tesla’s stock plummeted almost immediately after China announced its return volley, and continued to fall throughout the day to the tune of a 10 percent drop. Overall, Tesla’s stock value has fallen by nearly 44 percent since Trump took office.
That’s before you even mention Tesla’s dismal quarterly sales results, which came in lower than even the worst estimates at a three-year low. Analysts are now predicting a second straight year of sales decline for Tesla, which is bad news for Tesla’s long term outlook.
It’s all coming together to threaten Tesla’s status as a “growth stock,” an iron-clad company like Alphabet or Apple whose financial growth is seen as all but guaranteed. Of course, that future depends on a healthy and confident stock market, which we probably won’t see again for a while, as all signs point toward a recession.
Musk’s personal fortune, which is tightly connected to Tesla, likewise took a plunge. Thanks to Trump’s tariffs, his massive hoard of riches shed some $11 billion, for a 2.5 percent loss. Forbes had previously reported in March that Musk’s net worth was down by $104 billion since Trump took office on January 20th, a number that these tariffs might soon look like chump change as countries cancel Starlink contracts and the European Union prepares its own retaliatory measures.
As the world braces for further economic fallout in the weeks to come, it’s clear that Trump’s tariffs may have set off a chain reaction that could reshape global markets — and Musk’s EV empire — forever.
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