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Trump’s breaking point could come soon, analyst tells BI

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Good morning. Have you ever had a paintball gun let loose on your vehicle? No? You must not own a Cybertruck then. BI spoke with 10 Cybertruck owners about what it’s like driving the most controversial vehicle in the world.

In today’s big story, we’re looking at when the stock market sell-off could force President Donald Trump to drop his trade war.

What’s on deck

Markets: Ross Gerber predicted Tesla’s stock crash. Now he’s doubling down.

Tech: After 10 weeks of Amazon’s full RTO, some employees feel energized. Others quit.

Business: State and local governments across the US are looking to adopt their own DOGE.

But first, when is enough, enough?


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A graphic of a black-and-white headshot of Donald Trump with red Chinese bills in the background.
Getty Images; Jenny Chang-Rodriguez/BI

When will the losses become too steep to ignore? It could be soon.

Trump’s unflinching pursuit of his protectionist agenda has come at a cost: The S&P 500 officially entered a correction on Thursday, down 10% from its February peak.

So far, Trump’s team has shown that they’re willing to tolerate stock market pain — but at some point, that pain may become unbearable.

Marko Papic, the chief strategist at BCA Research, thinks Trump might not be far away from his breaking point. He said a 15% to 20% decline in the S&P 500 could force the president to start walking back his trade war.

Economist Desmond Lachman, meanwhile, says the issue is less about a specific drop and more about how quickly and severely the sell-off unfolds: “What’s occurred over the last couple of weeks, if that continues at this kind of pace, he’ll have to cave.”

As BI’s William Edwards writes, with top earners propping up consumer spending, a significant stock market decline could start to weigh on their willingness to open their wallets.

Investors can blame the trade war.

The latest development came on Thursday when Trump threatened a 200% tariff on wine and other alcohol products coming from the EU — a retaliatory measure against the EU’s new tariffs on $28.4 billion worth of US goods that included a quintessential American drink: whiskey.

Businesses, from wine shops to restaurants, are now on the rocks. One couple who run an Italian-Croatian restaurant told BI that they’re alarmed: “How does an Italian restaurant pivot away from European wine?”


Elon and Ross who glares at him on a blue background.
Emma McIntyre/Getty Images; Apu Gomes/Getty Images; Chelsea Jia Feng/BI

1. An early Tesla investor-turned-bear doubles down. In late February, Ross Gerber predicted Tesla stock would drop 50% this year. Since then, the stock has tanked. BI followed up, and Gerber doesn’t think a rebound is on the horizon.


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