Trump's tariffs damage the US economy more if they drive investors away from American assets

When President Donald Trump announced a sweeping set of tariff increases on April 2, he predicted that date would be remembered as “the day that we began to make America wealthy again.” Global investors expressed doubt in the following days. Both US stock and bond prices declined sharply, pushing bond yields higher. Surprisingly, the US dollar fell steeply as well against most other major currencies—the opposite of the usual result of tariff hikes.