Investing.com -- Yardeni Research's latest commentary highlighted the widespread unease caused by President Donald Trump's aggressive tariff policies, which have disrupted the traditional global order and led to what has been termed the New World Disorder. The economic repercussions remain uncertain, keeping investors and trading partners worldwide on high alert.
"Trump’s Tariff Turmoil has put the world on edge," Ed Yardeni states. "A new world order may be the ultimate result, but for now we’ve got the New World Disorder, leaving everyone scrambling to adjust to Trump’s unpredictable policy pivots. The economic fallout is uncertain. The uncertainty is keeping Wall Street on edge. It’s keeping US trading partner nations on edge."
First, Yardeni notes Trump's tarrif policy has everyone on edge. The US is currently in the midst of negotiating tariff agreements with 15 major economies, including Japan, the European Union, South Korea, and India. As of now, 75 countries have expressed interest in trade negotiations with the US. The ongoing uncertainty has had a depressive effect on global stock markets, particularly since April 2, 2025, known as "Liberation Day." However, stock prices experienced a significant rally on April 9 following President Trump's decision to postpone his reciprocal tariffs for 90 days on all countries except China.
Trump's tariff measures include a 25% tariff on steel imports, a similar tariff on aluminum imports, and a 25% tariff on all imported cars, trucks, and certain auto parts, effective as of April 3, 2025. Additionally, non-compliant goods from Canada and Mexico with the USMCA trade agreement also face a 25% tariff. On April 14, Trump hinted at a possible temporary exemption for the auto industry from the tariffs to allow carmakers to adjust their supply chains.
In technology news, the Commerce Department introduced new export licensing requirements on April 16 for AI chipmaker Nvidia (NASDAQ:NVDA), potentially impacting the company's earnings by an estimated $5.5 billion. This move also affects rival chipmaker Advanced Micro Devices (NASDAQ:AMD).
Second, Trump vs Powell has everyone on edge. The relationship between Trump and Federal Reserve Chair Jerome Powell has been contentious, with Trump expressing frustration over Powell's interest rate policies. Despite Trump's repeated criticisms and demands for rate cuts, Powell has maintained his stance on tariffs potentially causing inflation and slower growth. Trump has continued to pressure Powell for interest rate reductions and has even suggested he would like Powell to resign before his term ends in May 2026.
Third, the U.S. economy has everyone on edge. Yardeni notes economic indicators show mixed signals, with the US economy demonstrating resilience in some areas while facing recession risks and inflationary pressures. Consumer sentiment has dropped, but retail sales have shown unexpected strength. Industrial production declined in March, but manufacturing and mining outputs rose.
Fourth, earnings and valuations have everyone on edge. Analysts are adjusting their earnings estimates for S&P 500 companies for 2025 and 2026, reflecting concerns over the potential for a recession induced by tariffs. Meanwhile, Warren Buffett has remained an outlier, having been a net seller of equities for the past nine quarters, ending 2024 with a record cash reserve.
Fifth and sixth, China and Europe have everyone on edge. Globally, China is attempting to stimulate its domestic economy to counteract the negative effects of the trade war, while Europe faces challenges with a strengthening euro, which could hurt European company sales and earnings and increase the risk of deflation.