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The stock market is in a free-fall as Wall Street realizes that the Trump administration is serious about restructuring the global economy.

For decades, the dominant theme in trade and macroeconomics was globalization/ offshoring. This trend gutted America’s manufacturing and industrial base, effectively shifting millions of middle-class jobs overseas.

Why did American policymakers do this? What was the benefit to all these jobs and factories disappearing?

Corporate profits would rise as labor/ manufacturing overseas would greatly reduce costs. And since things would cost less to make, they’d sell for a cheaper price in the U.S.

In its simplest form, the political class in Washington told most of America: it’s OK that the factory and your job is gone because stocks will go up and things will be cheaper.

The Trump administration has decided to reverse this in a shock and awe campaign via tariffs. The goal is NOT the tariffs themselves… the goal is to FORCE companies to reopen factories, reshore manufacturing to the U.S.

Team Trump tried to warn that this was coming.

Treasury Secretary Scott Bessent stated point blank that the economy had become “addicted” to government spending and that it would need to undergo a “detox period.” And in a not so veiled jab against globalism, he stated that “access to cheap goods is not the essence of the American dream.”

Commerce Secretary Howard Lutnick went even further, stating, “This is a re-ordering of global trade for the benefit of America.”

And perhaps the single most telling statement was when the President stated, “I haven’t even looked the stock market.”

The stock market FINALLY got the message and has entered a free-fall. Companies that rely extensively on offshore manufacturing have been completely OBLITERATED. Yesterday, Apple (AAPL) which depends on China and other nations to produce its products stock declined 10%.

Nike (NKE) which relies heavily on Vietnam (a nation Trump slapped with a 46% tariff) collapsed 14%.

By comparison, McDonalds (MCD) which sources most of its supplies from within the U.S. went up over 2%!

The message here is clear: in the new Trump economy, there will be clear winners and losers. Those stocks that are globalized will suffer while those that are primarily domestic will succeed.

Those portfolios that are correctly aligned for this be just fine… others, not so much.

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