Dear Readers and Listeners,
Last week… Well… That was scary. Let’s get through the contours of this non-fiction American horror story.
You’ve probably heard by now that on Thursday and Friday, following President Donald Trump’s Wednesday, April 2, “Liberation Day” tariff announcement, the S&P 500 companies collectively lost roughly $5 trillion in value.
That was an all-time S&P record, according to data compiled by Reuters.
You may have also heard that in a note titled “There will be blood”, J.P. Morgan Chief Economist Bruce Kasman wrote to clients on Thursday, April 3: “The risk of recession in the global economy this year is raised to 60%, up from 40%.”
According to his calculations, this latest round of fees slapped onto imports is the biggest tax increase on U.S. households and businesses since 1968, the height of the United States’ war in Vietnam. He continued, “The effect of this tax hike is likely to be magnified — through retaliation, a slide in US business sentiment, and supply chain disruptions.”
On Friday China added to the pain by slapping American imports with a 34% counter tariff; and by expanding export restrictions on critical minerals, rare earths, and permanent magnets, to include most Western nations.
What that means is a Chinese exporter will need special permission from the government to sell and send items on the list to countries like France or Germany. It pressurizes the United States’ traditional allies and trading partners.
Rare Earths, Minerals, & Permanent Magnets China Is Restricting
Samarium
Gadolinium
Terbium - magnet
Dysprosium - magnet
Lutetium
Scandium
Yttrium
The podcast has covered space systems, rare earths, minerals, and permanent magnets and this administration’s trade policies. You can read and listen to these discussions here:
Space Money: Trump’s Tariffs Squeeze Supply of Minerals Critical To Space Systems - February 10, 2025
Space Money: Tariffs and Scarcity Equal Economic Shock - March 10, 2025
Like Lance Armstrong on steroids, that two-day loss for the S&P blew past the March 2020 record of $3.3 trillion. The beginning of the COVID-19 pandemic ignited that sell-off, as investors, even then, had an inkling of the coming disruptions to globalized supply chains. Now they clearly understand the risk.
But the S&P’s blood-letting accounts for less than half of the guts and gore. It’s been less than 80 days since the January 20 presidential inauguration. In that time more than $11 trillion in value has been erased from the U.S. public equities markets. The two-day sell-off of equities following Wednesday’s tariffs announcement, totaled $6.6 trillion in losses across Wall Street’s four main indices: S&P 500, Dow Jones Industrials, NASDAQ, and the Russel 2000.
The numbers are so big, that they beg for illustrative comparables.
GDP Major Space-Faring Nations in Trillions for 2023. Data is from the World Bank.
US : $27.7
China: $17.8
Russia: $2
France: $3
Japan: $4.2
The proportions of the sell-off is understood. It’s math. What’s less understood is where this is going for the macro economy and just how will it affect the space economy. We, the United States and all the nations it trades with, could be just at the beginning of this wild and uncertain ride.
What’s in this episode
The second quarter has opened with U.S. President Donald Trump’s sweeping “Liberation Day” tariffs, causing Wall Street to suffer its worst days in years. The U.S.-based space economy does not have immunity from the Trump Administration’s trade policies or the markets. This is look back at Q1 and a look forward to Q2.
Who’s in this episode
Chris Quilty - Founder, Quilty Space
George Pullen - Partner and Chief Economist at MilkyWayEconomy.
Reading
“Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits” - White House, April 2, 2025
“After Trump’s Tariffs, Stocks Plunged but Penguin Memes Ticked Up” - Eve Sampson, New York Times, April 5, 2025
Have a great week.
Ad Astra,
Laura
