President Donald Trump’s new reciprocal tariff policy is straightforwardly bad for the US economy and markets. The only conceivable reason that the S&P 500 Index was down just 4% on Thursday is that investors still don’t believe it will stick. Unfortunately, there’s no quick way out of this quagmire. No easy off-ramps via negotiation. No stock market “put” from the Federal Reserve. And no federal tax cuts or other stimulus that can sufficiently offset the hit.

Let’s take those issues one at a time.