Markets Are Tumbling. Tariffs Are Rising. China Retaliates.

I was in the room when Larry Fink told us what’s really coming.

There’s a difference between forecasting a storm and standing in the middle of one—and according to Larry Fink, we’re already getting drenched.

I was in the room at the Economic Club of New York’s event held at the Union League Club earlier this week when Fink, BlackRock’s longtime CEO, delivered a sobering, unscripted take on where the economy really stands. Not the kind of scripted corporate optimism we’re used to, but something rawer. Blunter. And far more unsettling.

As we gathered that morning, chaos was already unfolding. Just hours earlier, President Trump had threatened sweeping new tariffs on Chinese imports–a 50% levy unless Beijing reversed its retaliatory tariffs–sending shockwaves throughout global markets and prompting a sharp sell-off after a brief morning rally. You’ll be shocked to hear that China thus far isn’t budging and the Trump tariffs have gone into effect. 

The situation has only escalated since. Just this morning, Beijing hit back hard: China escalated the trade war by slapping 84% tariffs on all U.S. imports, effective immediately. Furthermore, they filed a new complaint against the United States at the World Trade Organization (WTO), challenging the legality of the U.S. tariff actions. The moves are a direct response to Trump’s decision to raise tariffs on Chinese goods to a staggering 104%.

Before diving deeper into Fink’s warnings, it's worth understanding who delivered the sobering assessment exactly.

Larry Fink is the founder and CEO of BlackRock, the world's largest asset manager, overseeing more than $11.5 trillion in investments. With BlackRock's reach spanning over 100 countries, Fink regularly speaks with CEOs, central bankers, and political leaders worldwide. When he talks about the economy, he's drawing on insights from one of the most expansive financial networks on the planet. 

And what did this uniquely informed financial leader have to say? Fink didn’t mince words: 

“Most of the CEOs I talk to believe we’re in a recession. Not that one’s coming, that we’re in it, now,” he said.

There were looks exchanged around the table and some head nodding. 

And then he kept going.

Fink pointed to last week’s market chaos: “Global equity markets were hit with a stampede of selling… trillions of value wiped out after President Donald Trump unveiled a raft of unexpectedly sweeping and complicated tariffs. Investors dumped risk and raced to buy bonds, seeking safety and wagering on the Federal Reserve cutting interest rates…”

He added, “I would say, in the long run, this is more of a buying opportunity than it is a selling opportunity.”

After a brief pause, he continued with the sobering qualifier: “That doesn’t mean we can’t fall another 20% from here, too.”

An additional 20% slump in the stock market?! *GULP* Audible gasps were heard, and the air got heavier.

Fink didn’t just cite abstract macroeconomic forces. He made it personal, even tactile. To illustrate how tariffs are already squeezing American consumers, he pointed to the cost of Barbies–yes, Barbies. “People don’t understand how bad these tariffs are for them,” he said. “They see the prices go up, but they don’t connect it to the policy decisions.”

Fink warned of an economic slowdown that could intensify in the coming months. He said the U.S. dollar is likely to weaken, and consumption will probably decline as Americans adjust to the magnitude of the tariffs and their ripple effects on the broader economy.

He described what’s coming as “economic pain,” not just the slow, simmering kind, but the kind that hits fast and disorients—the kind that leaves people looking at their bank statements, wondering where it all went.

So why does this matter?

Because if we’re already in a recession, and if major corporate leaders are operating under that assumption, we need to stop pretending we’re in a “wait and see” moment. We’re not.

Fink raised concerns about the domino effect, from consumer spending to supply chains to corporate investment. Companies are already tightening their belts. “We’re seeing freezes. Delays. Pullbacks,” he said. Supply chains, which were starting to stabilize post-pandemic, are being rattled again, not by natural disasters or pandemics, but by policy decisions—decisions made not for economic strategy, but for political leverage.

And here's the part more people should be talking about: the chilling political climate. Fink spoke about how CEOs are now weighing not just business risks but political retribution. "There's obviously no small amount of risk in running afoul of the president," he said. "He's shown himself willing to inflict a lot of economic pain on his critics." Let that sink in. Business leaders are calculating risk not just in market terms, but in terms of political survival. This represents a fundamental shift in how American capitalism operates.

Then he went even further: “We (the US) are no longer the stabilizer in the world—we are the destabilizer.”

Coming from the CEO of the largest asset manager on the planet, that wasn’t just an observation. It was a warning.

Just as striking was what Fink didn't say. He didn't offer any reassurance that this was temporary. There was no classic Wall Street optimism about strong fundamentals or a soft landing. He didn't lay out a clear policy fix or hint at how this might be turned around. He didn't express confidence in U.S. leadership, in fact, he did the opposite. And he didn't attempt to separate the fates of Wall Street and Main Street. Quite the contrary: he made it clear that everyday Americans are already in it–financially exposed, politically destabilized, and economically unprepared. He reminded us that 62% of Americans now hold stocks. This isn’t Wall Street versus Main Street. Wall Street is Main Street, and both are feeling the hit.

Here’s the full interview with Larry Fink, in case you’re interested.

I left that lunch shaken—not by any single soundbite, but by the accumulation of them. By the realization that we’re already living through the downturn and that for millions of Americans, it won’t feel like a recession is coming, it’ll feel like they missed the memo that it already began.

The Barbie aisle isn’t just more expensive. It’s a canary in the coal mine.

While I normally write about current events through the lens of national security, I also try to share the insights I pick up along the way—especially when they have immediate, real-world consequences for all of us. This was definitely one of those moments.

I hear from many of you: retirees, families, working professionals, recently laid-off government employees, who are trying to make sense of rising costs and shrinking margins. Some of you are living on strict budgets, asking questions like: How do I make this work? What do I need to brace for next? These aren’t abstract concerns. They’re real, daily decisions. And they deserve honest context.

I don’t say any of this to alarm you, but to help you think about how to steady yourself. For investors and consumers alike, this is a time for thoughtful planning, not panic (though I know that’s easier said than done). If you can, consider building up emergency savings, trimming non-essential expenses, and checking that your investments are well-diversified. We may not have control over global markets or policy decisions, but we do have some control over how we prepare. In a climate like this, even small, steady steps can make a real difference.

Until next time,

Olivia