[The Editors' Verdict] 50 Days After Trump's Inauguration: The Party Is Over

Spread of 'R Fear' Triggered by Trump
Radical Trade War Boomerangs
Time to Reflect on the Pro-Market Reagan Administration

"The Trump Bump is over." The U.S. financial media outlet Barron's recently reported, "Tariffs have dealt a fatal blow." The term "Trump Bump" refers to the phenomenon where stock prices surge or economic indicators improve due to expectations surrounding Donald Trump's policies. When Trump was first confirmed as president, U.S. stock markets rallied on heightened expectations for pro-market policies such as deregulation and tax cuts. However, just over 50 days into his presidency, the situation changed dramatically. Global asset markets cooled rapidly, and fears of a "Trump-induced recession" began to emerge not only in the United States but around the world. This was due to growing uncertainty from the global tariff war.

In fact, the U.S. stock market fell below pre-election levels just two months after Trump's inauguration. On March 10 (local time) alone, the combined market capitalization of seven major tech giants-Apple, Nvidia, Tesla, and others, known as the Magnificent 7-plunged by more than 1,100 trillion won.

Nevertheless, President Trump and his aides have repeatedly expressed their determination to push ahead with tariff policies, even at the risk of a recession, further worsening investor sentiment. In fact, regarding the recent stock market slump, President Trump commented, "I don't look at the (stock) market," indicating that he was unconcerned. This stands in stark contrast to his stance during the previous election, when he credited himself for the rising U.S. stock market, calling it the "Trump Rally." However, as a businessman, he is known to believe that stock prices are a barometer of public sentiment. During his first term, he often cited the rise in stock prices as one of his key achievements.

There is also growing pessimism that the Trump administration's radical trade war could backfire and trigger inflation within the United States. Recently, as key economic indicators have fallen short of market expectations, fears of "stagflation"-rising prices amid economic stagnation-originating from the U.S. have begun to surface globally.

President Trump is well-known for admiring Ronald Reagan, the 40th president of the United States. Reagan's slogan, "peace through strength," is also a guiding principle for Trump. Trump even adapted a slogan from Reagan's era to create his own political mantra, "MAGA" (Make America Great Again). On February 6, Reagan's birthday, Trump reportedly moved a portrait of George Washington from his office and replaced it with one of Reagan.

However, President Reagan believed that the solution to reviving the U.S. economy lay not in the government, but in the market. He approached every issue from this perspective, championing a stronger pro-market, neoliberal paradigm that ultimately led to an economic recovery in the United States.

Reagan was also famous for his belief in the importance of alliances. In contrast, Trump's tariff war, which has even alienated U.S. allies, is increasingly seen as a path toward American isolation.

If it were possible, one might genuinely wonder what advice President Reagan would give to President Trump, like the portraits of former headmasters in the principal's office at Hogwarts in the Harry Potter series. Or perhaps, as U.S. Democratic Senator Elissa Slotkin suggested, "Reagan must be rolling in his grave."