Cathie Wood, CEO and CIO of Ark Invest on April 4, delivered a candid analysis of the current state of global markets as she spoke at the latest “Employment Friday” session.
The conversation, which was held against the backdrop of President Donald Trump’s newly imposed tariffs, revealed Wood’s perspective on the market turmoil and the potential impact of these trade policies on the broader economy.
On April 2, 2025 — dubbed “Liberation Day” — Trump announced sweeping new tariffs targeting key U.S. trade partners.
A universal 10% base tariff will apply to all imports starting April 5. Country-specific tariffs will follow on April 9: 26% on India, 34% on China, 24% on Japan, 20% on the EU, and 10% on the UK.
Trump framed the move as “reciprocal,” claiming other nations have taken advantage of America for too long.
“Markets are in quite a bit of turmoil because of the tariff what we thought were going to be negotiations,” Wood began, discussing how the global markets have reacted to the news of Trump's "Liberation Day" tariffs.
The tariffs, which aim for reciprocity and fairness in trade, are an effort by Trump to level the playing field, but Wood questioned the strategy's effectiveness.
“We know how he calculated his version of reciprocity, but it doesn't seem to make very much sense,” she remarked. This uncertainty is creating volatility across various sectors, and Wood believes it’s a pivotal moment for markets, with a fine line between negotiations and a potential downturn in the economy.
Trump’s tariffs could lead to economic turmoil: Wood
Wood highlighted that President Trump’s approach could, if not managed carefully, push the economy into a recession or cause a significant bear market. However, she remains optimistic, predicting that as negotiations progress, the situation will stabilize.
She noted, “Trump wants to be one of the greatest presidents ever... he’s not going to get there by throwing the economy into a recession and the stock market into a bear market.”
As markets grapple with the ongoing tariff news, Wood noted that this situation is not yet a definitive downward trend but rather a period of heightened uncertainty.
Despite the current turmoil, Wood sees potential for a productive resolution of these negotiations, which would help restore stability.
“I think his negotiations will kick into gear and will be more productive than what we've heard recently,” Wood said, holding onto the belief that a stronger, more stable economic environment is on the horizon.
Further compounding the issue, Wood pointed out that sectors such as middle management in the tech space and other industries are also facing uncertainty as AI continues to replace some roles.