Trump tariffs may spark biggest market crash since 1987—expert warns
What's the story
US President Donald Trump's latest trade tariffs have raised fears of a global market recession, with US TV personality and market commentator Jim Cramer predicting a catastrophic drop.
On April 5, Trump announced a 10% "baseline" tariff on imports from all nations.
The announcement triggered major declines in US indices, including the S&P 500, which dropped 6%, its worst weekly performance since COVID-19 hit in March 2020.
Market impact
Dow Jones and NASDAQ experience significant drops
The Dow Jones and NASDAQ also saw huge losses, with the former falling 5.5% and the latter plummeting by 5.8%.
Over two days, the Dow Jones lost 1,679 points on Thursday and another 2,231 points on Friday. It was its worst two-day slide since March 2020.
The negative impact of these tariffs wasn't limited to US markets but was felt globally across Europe and Asia too.
Market forecast
Cramer warns of potential market bloodbath
Speaking on his CNBC show Mad Money, Cramer warned the markets could face a bloodbath like the 1987 crisis.
He suggested that if President Trump doesn't engage with nations that haven't imposed retaliatory tariffs and reward them for compliance, things could get worse.
"If the president doesn't try to reach out and reward these countries and companies that play by the rules...the 1987 scenario has the most cogency," he said.
Economic outlook
Strong job data may prevent recession
Despite the market turmoil, Cramer noted that strong job data could prevent a recession.
He said, "It makes it less likely a crash will necessarily lead to a recession."
This comment comes as JPMorgan Chase & Co. also predicted that the US economy will enter a recession this year due to the impact of new tariffs announced by Trump.