Three Things (4/4)

Liberation Day Meltdown

President Donald Trump marked “Liberation Day” by unveiling sweeping new trade penalties, including a 10% blanket tariff on all imports and up to 50% “reciprocal” tariffs targeting countries with significant trade surpluses. China faces a combined 34% tariff burden, while the EU and Japan also landed in the crosshairs. The market reaction was swift and brutal: the S&P 500 dropped 4%, wiping out nearly $2 trillion in market value, with tech and multinational stocks leading the decline.

“Liberation Day” may be the administration’s label, but markets saw anything but freedom. Investors are now staring down the barrel of higher input costs, weakened global demand, and the specter of retaliatory measures. The tariffs threaten to undo the fragile recovery in corporate earnings, drive up consumer prices, and force businesses to rethink their supply chains overnight. Rather than signaling a new era of strength, the launch of Liberation Day tariffs may mark the start of a high-stakes economic standoff with global consequences.

China Closes the Checkbook

In retaliation to escalating U.S. tariffs, China is restricting outbound investment into American firms, targeting industries like tech, AI, semiconductors, and data infrastructure. The move marks a significant escalation in economic tensions, with Beijing shifting from tariff retaliation to capital controls—a rare but potent signal of deepening divide. For U.S. startups and venture-backed firms, particularly in sensitive sectors, the loss of Chinese capital could close off a major funding channel.

This isn’t just a tit-for-tat response—it’s a strategic pivot toward long-term decoupling. With both countries weaponizing trade and investment flows, global business is entering a new era of fragmentation. Companies that once thrived on cross-border capital and open markets now face political firewalls. And for investors, the message is clear: globalization as we knew it is over, and navigating geopolitics is no longer optional—it’s central to doing business.

Hiring Holds, Raises Don’t

U.S. private employers added 184,000 jobs in March, per ADP, showing steady demand for workers in leisure, hospitality, and construction. But beneath the headline, momentum is slowing: wage growth for job-stayers fell to 5.1%, its lowest pace in over three years. While the job market remains tight, this slowdown suggests that companies are dialing back their urgency to compete for talent, especially in lower-wage sectors.

Hiring may still be healthy, but the shift in wage dynamics is meaningful. As pay growth moderates, household purchasing power could start to erode—just as tariffs threaten to push prices higher. If this trend continues, it risks weakening one of the economy’s most resilient pillars: consumer spending. The labor market isn’t falling apart—but it’s no longer giving workers the upper hand, and that shift could ripple through retail, housing, and services in the months ahead.