As stock slumps drain America’s 401ks, Trump props up his billionaire sidekick

As Wall Street reeled for a second straight day on Tuesday, President Donald Trump chose not to appear with worried working people but to prop up the share prices and wealth of the world’s richest man – Elon Musk – with a bizarre sales pitch for Tesla on the White House South Lawn. The optics of Trump responding on camera in this way to a stock exchange rout that has wiped billions from Americans’ retirement accounts amid anxiety over his trade wars and erratic leadership were striking. That was especially the case given public anxiety caused by sell-offs that have sent the S&P 500 down nearly 10% from its highs and Trump’s yet to be fulfilled vows as a candidate to quickly cut the prices of groceries. In the 2024 campaign, Trump donned an apron and worked a McDonald’s fries station and clambered aboard a garbage truck in a fluorescent vest in effective photo-ops that stressed his kinship with regular Americans and the Democrats’ failure to connect. But with mounting fears of a recession – a possibility Trump twice refused to rule out on Sunday, stunning markets – the president seemed most concerned about a fellow billionaire at the White House. Top aides meanwhile downplayed investor panic as a mere symptom of a “period of economic transition.” Trump stood with Musk next to a gleaming line-up of the electric vehicle mogul’s pioneering models and condemned protests and threats targeting Tesla dealerships as the head of the Department of Government Efficiency shreds the bureaucracy and slashes government spending. The president condemned Musk’s critics for treating him “unfairly,” adding, “You can’t be penalized for being a patriot.” Tesla shares rebound as the Dow crumbles Musk, the most powerful private citizen inside a presidential administration in modern times, is facing product boycotts and protests as he takes a chainsaw to the federal government. Most demonstrations have been peaceful, but police are investigating widespread reports of vandalism in some locations. The market value of Musk’s firms has also plummeted since he took on his polarizing new role in politics. But thanks to Trump’s endorsement – and promise to buy a Tesla Model S – Tesla shares climbed 3.8% on Tuesday, heading in the opposite direction of the Dow Jones Industrial Average, which dipped 478 points (1.4%). Asked whether his event for Tesla would boost the company’s sales and share prices, the president said, “I hope it does.” At times, as Trump and Musk talked up the Teslas, they looked more like salesmen on a dealership forecourt than the world’s most powerful man and its wealthiest. Trump held a paperlisting the prices of various models pictured by a Getty Images photographer that noted that a basic model can be leased for $299 a month. “Who else but this guy would design this and everybody on the road is looking at it,” the president marveled in front of a Cybertruck. Musk replied: “We want the future to look like the future.” On a sunny March day in Washington, the president was in a good mood, and he cracked jokes as he bantered with a press pool and staff. In a more normal administration, the photo op might be passed off as simply a president highlighting a great American company. In 2021, for instance, then-President Joe Biden took a hybrid electric Jeep on a ride through the White House grounds. But it’s a mark of how Trump and Musk have shattered the normal ethical conventions surrounding the presidency that the event took place at all. It represented a staggering conflict of interest for a president to conduct a sales pitch for a product owned by a member of his administration who is in a position to shape government policy and regulations to benefit his own firms. One reporter asked the DOGE chief whether he’d continue as Tesla CEO while in government. He replied that he would, as if it were the most normal thing in the world. Trump’s show of support for Musk came as The New York Times reported that the Tesla boss, who spent tens of millions to back the president and the GOP in 2024, is looking to give $100 million to organizations controlled by the Trump political operation. CNN has not independently confirmed the reporting. Trump’s uncertainty is weighing on markets, expert says Trump’s Tesla event came on another day of head-spinning exchanges with Canada that typified the volatility spooking markets. The president had threatened to slap a 50% tariff on Canadian steel and aluminum imports after Doug Ford, the premier of Ontario, broached a 25% surcharge on electricity exports to Michigan, Minnesota and New York. The escalation was defused after a telephone call between Commerce Secretary Howard Lutnick and Ford, a Trump-style populist. The president praised the premier as “strong” as each side claimed the other had backed down. The spat was the latest in an extraordinary series of disputes between the Trump administration and Canada, one of America’s closest allies, that has shattered the idea that the two nations, as well as Mexico, could form a trade bloc to compete with the European Union and China. Indeed, Trump again insisted Tuesday that Canada should become the 51st state. The prospect of an all-out trade war, and the president’s other disruptive policies as he’s sided with enemies such as Russia and rebuked allies across the Atlantic, has conjured a febrile atmosphere that has rattled investors. Trump’s failure to rule out a recession this year in an interview with Fox News on Sunday was the last straw for the markets. His unpredictable policy moves are rocking economic sentiment at exactly the wrong moment, as hiring slows and consumer confidence ebbs. Diane Swonk, chief economist at KPMG US, compared the situation to drivers pulled up at a broken stoplight, unwilling to cross a busy intersection because they fear getting into a crash. “That’s what we are seeing in real time right now. We are seeing uncertainty weigh on the economy,” Swonk told CNN’s Erin Burnett. “We are seeing it have a direct toll, we are seeing it on all the earnings calls … where people say, ‘We can’t give you any guidance about where we are going because we don’t know what is going to happen with tariffs, we don’t know what is going to happen with borders.’” But alongside Musk, Trump blamed stock market losses on his watch on Biden, whom he falsely said “gave us a horrible economy.” Trump added: “I think the market was going to go very, very bad” despite predicting last year stocks would soar when he took office. There is no public sign that Trump is thinking about changing course, despite the painful market losses that are not only leaving many citizens scared for their future retirement funds but also making life uncomfortable for those who are already retired and have to live on their diminishing 401ks. This prompts the question of whether Trump is serious about his desire to transform the world trading system and the US economy whatever the cost. White House press secretary Karoline Leavitt argued on Tuesday that the current short-term pain would be a distant memory when Trump’s policies come to fruition. “What the president envisions for this country is for the United States of America to be a manufacturing superpower, where there are American factories and businesses owned by Americans producing goods that we are exporting to the rest of the world,” Leavitt told reporters. “Those revenues will stay here. It will increase wages for people here in our great country. It will ensure our national security and it will boost the morale of the American people to have thriving industries again.” The goal of bringing jobs back to the US from low-wage economies abroad is commendable, and Trump’s plan to remodel the economy is a response to the hollowing-out of industrialized areas and the uneven benefits of globalization. These themes have helped him twice win election to the White House, and there is no doubt he’s responding to the aspirations of his voters. Yet such a fundamental reshaping of the economy could take decades, and there’s no certainty that big business will take costly decisions to relocate in the less than four years Trump has left in the White House. In the meantime, tariffs, which result in higher prices for consumers, could cause huge economic damage. And trying to recreate a 20th century economy in a new era dominated by the implications of an artificial intelligence revolution might be a retrograde bet in any case. After his uncharacteristic lack of bombast over the economy on Sunday, Trump is back to invoking a golden age. Asked about the possibility of a recession, he replied, “I don’t see it at all.” He added, “I think this country is going to boom.” But the doubt created by the president’s weekend equivocation on the issue will take time to dispel. And he did a better job cheerleading for his friend’s car company Tuesday than convincing his doubters he’s got a plan to make the economy great again.