Recently, the U.S. stock market has continued to decline, drawing market attention. The S&P 500 index has fallen for three consecutive weeks, with a cumulative drop of 3.6% this week, hovering around its lowest level since November last year. The Nasdaq index fell by more than 2.6% on Thursday, March 6, entering a technical correction area. However, U.S. President Trump stated that this market turbulence is unrelated to his tariff policy and denied that market fluctuations would affect government decisions.
Trump: Market Fluctuations Won't Affect Policy Making
In a public statement on March 6, Trump made it clear that the government would not consider the stock market's reaction when formulating tariff policies and attributed the U.S. stock market decline to "globalists." When asked whether the tariff policies on Canada and Mexico would be delayed due to market decline, Trump responded, "This has nothing to do with the market. I'm not even thinking about the market because in the long run, America will become stronger because of this."
Trump further emphasized that the tariff policy is aimed at addressing long-standing unfair exploitation of the U.S., stating, "This is about how companies and countries have exploited our nation — our beloved America. And that will no longer happen."
Moreover, Trump accused "globalists" of being responsible for the market decline. He stated, "Our country has been treated unfairly, and many globalist countries and businesses are suffering because we are reclaiming the benefits we once lost. I don't think globalists want to see America become prosperous."
Government Officials Support Trump Policies, Urge Investor Confidence
U.S. Commerce Secretary Howard Lutnick also stated in an interview on the same day that short-term stock market fluctuations do not matter, emphasizing instead the importance of U.S. factory capacity and employment growth. He even urged investors to "bet on Trump" and expressed confidence that U.S. stocks will experience explosive growth in the future. He said, "If the market doesn't rise tomorrow, it's because investors haven't realized they should support Trump. If I were them, I'd understand that betting on Trump means betting on victory."
Other Trump administration officials share similar views. Treasury Secretary Bessett said on Tuesday that the sell-off in U.S. stocks is only a temporary phenomenon, and in his speech to Congress on the 4th, Trump also emphasized that new tariff policies may cause short-term market fluctuations, but this is a necessary price for long-term economic benefits.
Market Doubts If "Trump Put" Is Still Effective
It is noteworthy that Trump once regarded stock market performance as an important KPI of his administration, termed as the "Trump put" by the market, meaning he wouldn't let the stock market fall too far. However, the current situation seems to have changed.
Nomura economists pointed out in a report that recent market fluctuations have led investors to question the effectiveness of the "Trump put." BCA Research also warned that unless the U.S. stock market faces a bear market risk, Trump is unlikely to adjust policies for the benefit of investors. The firm predicts that the S&P 500 index may need to fall another 15% from its February high, reaching a total decline of 20% into a technical bear market area, before Trump's policy may shift.
Overall, despite concerns about Trump's tariff policy, the White House remains firm, believing that short-term market fluctuations will not affect long-term economic planning. Investors need to continue to monitor future policy changes and their impact on the market.
