Donald Trump's Tariffs Face Economist Scrutiny Despite Strong Market Returns

Yahoo Finance · 2026-10-31

During nearly six years in office across two nonconsecutive terms under President Donald Trump, the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite have generated significantly above-average annual returns compared to most presidential administrations since the late 1890s. While Wall Street's bull market was heavily fueled by the artificial intelligence infrastructure expansion that began prior to his second term, investors also reaped massive gains from the Tax Cuts and Jobs Act signed in December 2017. This landmark legislation slashed the peak marginal corporate income tax rate to 21 percent, marking the lowest level since 1939 and supercharging record share buybacks across the S&P 500. Nevertheless, economists warn that President Trump's aggressive tariff and trade strategies carry unintended negative consequences that could outweigh these fiscal advantages.

AI 시장 분석

During Donald Trump's presidency, major indices like the S&P 500 and Nasdaq posted high annualized returns. In particular, the 2017 tax cut policy, which lowered the top corporate tax rate to 21%, drove share buybacks and a strong stock market. On the other hand, economists warn that tariff policies could cause unintended side effects and burden the economy.

상승 영향

Growth Stocks — Pro-business tax cut policies, such as the 2017 reduction of the corporate tax rate to 21%, boosted corporate profits and share buybacks, driving the S&P 500 and Nasdaq higher.
AI — Continued technological innovation, such as the establishment of AI infrastructure, provides direct benefits to Wall Street's bull market inflows and the earnings growth of related companies.

하락 영향

Consumer Goods — Trump's tariff and trade policies cause increased import costs and supply chain disruptions, putting pressure on corporate margins and negatively impacting stock prices.
Stock Market — Unintended side effects and cost-push pressures from tariff policies increase the risks of overall economic growth slowdown and worsening corporate performance.

DYAX 전담 분석

The Trump administration's corporate tax cut policy directly induced improved corporate earnings and record-breaking share buybacks for the S&P 500, acting as a powerful positive factor for the stock market. However, high tariff policies are causing increased costs and supply chain disruptions, exerting downward pressure on the overall stock market and consumer goods sector.

If tariffs are expanded in the future, inflationary pressures and narrowed corporate margins are expected, whereas if deregulation and additional tax cuts materialize, the growth stock-centered rally could continue. Key indicators to watch are the inflation rate and the trend of revisions to corporate earnings forecasts.

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