The wealth of the five richest people in the world, who attended Donald Trump's inauguration on January 20, has since decreased by $209 billion, with Elon Musk losing the most, writes Bloomberg. Meanwhile, the period between Trump's election and his inauguration was very good for the world's richest people, as the S&P 500 index reached several historical highs. Investors flocked to stock and cryptocurrency markets, expecting Trump's policies to be beneficial for business. Tesla by Elon Musk rose by 98% in the weeks following the election, reaching a record high. LVMH by Bernard Arnault gained 7% in the week leading up to inauguration day, making the French magnate $12 billion richer. Meta* Platforms by Mark Zuckerberg rose by 9% before the new term began and another 20% in the first four weeks of Trump's tenure.
However, all expectations were overturned by the trade war initiated by the Trump administration not only with China but also with long-standing partners — Mexico and Canada. The S&P 500 index has lost 6.4% since Trump took office, as mass layoffs of civil servants and the president's wavering on tariffs unsettled stocks.
The US stock market lost $4 trillion due to the trade war initiated by Trump, who not only started the largest trade war in nearly a century but also constantly changes the rules of the game. Gradually, investors realized that the threat to impose radical import duties is not a negotiating position to extract concessions from trading partners, but Trump's fixed idea. He is even willing to risk a recession in the US economy for them.
As The New York Times writes, in the eight weeks of his presidency, Trump no longer rules out the possibility of a recession, even though he came to the White House on a wave of general economic discontent, promising economic growth. The economy inherited by Trump was in good shape by many measures: low unemployment, moderate growth, and inflation, which, although remaining higher than the Federal Reserve wants, has significantly decreased. But the uncertainty his policies have brought to the outlook sharply contrasts with the picture Trump painted during the election campaign, the publication writes. «We will start a new era of rapid income growth, — Trump declared at a campaign rally in October. — Unprecedented wealth growth. Millions and millions of new jobs and a booming middle class. We are going to thrive like never before».
Forecasts by JP Morgan and Goldman Sachs suggest that a recession next year has become more likely due to Trump's tariffs. However, he calls it a «transition period», after which he promises improvements. His comments on the recession came amid a stock market decline — the S&P 500 index fell by 2.7% on Monday after a 3.1% drop last week. After which even some Republicans began to express concerns about increasing tariffs.
On Monday, when the stock market experienced its worst day since December, White House officials tried to redirect the conversation. Commerce Secretary Howard Lutnick said on Sunday that there is «no chance» of a recession. Scott Bessent, the Treasury Secretary, was less categorical, stating on Friday that a «natural adjustment» would occur as the economy goes through a «detox period» when it will rely on government spending.
Meanwhile, Senator Ron Wyden, a member of the Senate Finance Committee, said that the Trump administration's approach to tariffs is «poison» for the US economy. «The chaos they create every day is essentially an anchor tied to the American economy, and the longer this continues, the more of our workers will find themselves underwater», — NYT quotes him.
Meanwhile, the companies of billionaires who attended Trump's inauguration turned out to be some of the biggest losers as a result of his subsequent actions. According to Bloomberg, Elon Musk lost $148 billion. Consumers in Europe are disappointed with Musk's support for far-right politicians, and Tesla sales in Germany fell by more than 70% in the first two months of this year. Chinese deliveries also fell by 49% last month, to the lowest level since July 2022.
Jeff Bezos lost $29 billion. Amazon donated $1 million to Trump's inauguration fund in December, but since January 17, the company's shares have fallen by 14%. Sergey Brin lost $22 billion, Alphabet shares fell by more than 7% in early February after the company failed to meet quarterly revenue estimates. Mark Zuckerberg and Bernard Arnault each lost $5 billion.
* Meta is recognized as an «extremist» organization in Russia.
Photo: Reuters