Market expert and CNBC host Jim Cramer issued a dire warning that the U.S. could face a financial catastrophe akin to the infamous “Black Monday” crash of 1987 if President Trump moves forward with his proposed tariff strategy without reconsideration.
Cramer, referencing the devastating single-day plunge of 22.6% in the Dow Jones Industrial Average that occurred in 1987, cautioned that a similar collapse could happen again. His comments came after Wall Street experienced a steep two-day decline triggered by Trump’s announcement of broad tariffs impacting nearly 90 countries.
“If the president doesn’t try to reach out and reward these countries and companies that play by the rules, then the 1987 scenario… the one where we went down three days and then down 22% on Monday, has the most cogency,” Cramer said during his show on Saturday.
“We will not have to wait too long to know. We will know it by Monday,” he added.
The president rattled financial markets worldwide on Wednesday when he declared an across-the-board 10% tariff on all goods entering the United States. An additional wave of increased tariffs is scheduled to take effect on April 9, hitting key trade partners such as China, the European Union, Japan, and Vietnam.
In response to the announcement, China declared that it would impose retaliatory tariffs of its own.
In the wake of what Trump dubbed “Liberation Day,” the Dow Jones suffered a staggering 3,910-point loss over two days — the largest two-day fall since the COVID-19 market crash.
The S&P 500 was also hit hard, dropping nearly 6%, while the Nasdaq Composite saw similar declines as investor confidence took a severe blow.
Altogether, U.S. stock markets lost approximately $6.6 trillion in value during the selloff.
Although Cramer had initially expressed support for Trump’s tough trade measures, he signaled that he might be forced to change his stance if financial conditions deteriorate further.
“If President Trump stays intransigent and does nothing to ameliorate the damage that I saw these last few days, I’m not going to be constructive here,” Cramer said.
“And if Europe moves against our fabulous tech companies next week, then I will be furious.”
Torsten Slok, chief economist at Apollo, also weighed in with a stark prediction, cautioning that the U.S. economy may tip into a recession if the tariff standoff continues.
“If these levels of tariffs stay in place for several months and other countries retaliate, it will cause a recession in the US and the rest of the world,” the expert said on Friday.
Despite the increasingly bleak projections from economists and market observers, Treasury Secretary Scott Bessent insisted the administration has no intention of backing down and attempted to allay concerns about a potential downturn.
“There doesn’t have to be a recession. Who knows how the market is going to react in a day, in a week. We’re building the long term,” Bessent, a former hedge fund manager, said in an appearance on NBC News’ Meet the Press.