• President Donald Trump’s “Make America Wealthy Again” executive order shocks professional investors on Wall Street.
• Trade deficits do not lead to recessions; however, higher tariffs can cause downturns, one market expert says.

No economist I’ve interviewed in the past 40 years has ever suggested, even mildly, that high tariffs on imports are a way to grow the U.S. economy.

Ditto for all the lectures I heard when I took economics classes at Michigan State University or studied for my MBA at Bellarmine University in Louisville. Same’s true for at least one mid-1980s movie.

Ah, as the phrase goes now, but here we are.

How the day began on Wall Street

Wall Street cast its vote on President Donald Trump’s tariff tsunami by losing 1,152.63 points, down 2.73%, in the first minutes of trading Thursday morning. It’s the first trading day after the president announced wide sweeping tariffs after the regular trading ended Wednesday afternoon.

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Shortly before 9:33 a.m., the Dow was trading around 41,02.69 points.

By 10 a.m., the Dow fell further and was trading at 40,842.39 points, down 3.27% or 1,382.93 points.

Shortly after 10 a.m., the Dow kept falling and was down 3.52% or losing 1,485.55 points to trade at 40,739.77 points.

It’s a big market sell-off, make no mistake.

The screen was red with stocks in individual companies that were trading down immediately after executives from Newsmax, the conservative cable channel, opened trading and rang the bell on the New York Stock Exchange to celebrate that company’s initial public offering. Yahoo had trouble at one point with “some temporary issues” where the market data was delayed, likely due to all the activity.

We all knew more tariffs were on the way. But Trump’s “Make America Wealthy Again” executive order seems to have shocked professional investors.

To be sure, talk continues about more lobbying, possible exemptions to tariffs, and continued negotiations that can soften the tariff blow. You’re still hearing phrases like, “If these are sustained.” Or suggestions that companies will adjust their operations.

Economic outlook gets worse, according to analysts

Even so, many fear an economic slowdown — plus higher inflation — ahead due to price increases to cover the substantially higher costs associated with tariffs on imported cars, clothing, grocery goods, parts and components and other necessities.

As prices go up, no doubt, demand for many items will go down.

“The stock market has spoken loud and firm. It has no appetite for tariffs,” wrote David Sowerby in his report Thursday morning.

Sowerby, managing director and portfolio manager for Ancora Advisors in Bloomfield Hills, said based on futures pricing for stock activity this morning stocks soon could be down 11% from their peak levels hit Feb. 19.

“The economics are quite simple: tariffs now totaling about $600 billion are ultimately a tax increase,” Sowerby said.

Sowerby said the cost of tariffs would equal 2% of the nation’s gross domestic product and would amount to the largest tax increase in more than 50 years.

“Trade deficits do not lead to recessions; however, higher tariffs can cause downturns,” Sowerby wrote.

Wall Street analysts, as a result, are lowering their profit forecasts and increasing their recession risks.

“In short, investor sentiment has turned decidedly bearish in the last month, in contrast to the favorable views, post the November election,” Sowerby wrote.

Analysts said the depth of the tariffs announced Wednesday stunned everyone. They included a 20% tariff on imports from the European Union, 46% on Vietnam and a new 34% tariff on China that will drive up tariffs on goods from China to an eye-popping 54%.

Trump’s “tariff blitz,” as it was dubbed by the Wall Street Journal, includes at least a 10% baseline tariff across the board.

We’re looking at a mammoth level of tariffs. What’s important to understand here is that U.S. tariffs will hit a new weighted-average rate of around 25% or higher, based on various estimates, which experts note is bigger than the Smoot-Hawley Act.

Anyone remember Smoot-Hawley? Anyone?

More: Monthly car payments could go much higher after Trump tariffs hit

Trump’s new experiment in economics has triggered all sorts of memes on social media, including the scene from “Ferris Bueller’s Day Off.”

Anyone remember the key scene in the 1986 comedy? No, not the joyride through Chicago in the red 1961 Ferrari 250 GT California Spyder. But the one where Ben Stein plays a high school economics teacher speaking to a bored class about how the Hawley-Smoot Tariff Act of 1930, also known as Smoot-Hawley, raised tariffs in an effort to collect more revenue for the U.S. government.

“Did it work? Anyone, anyone know the effects? It did not work and the United States sank deeper into the Great Depression,” Stein tells his class.

Lesson learned?

Contact personal finance columnist Susan Tompor: [email protected]. Follow her on X @tompor.