In times of tribulation, I turn to the world’s great minds for insights. Yesterday in my daily column, I quoted the Chinese philosopher Sun Tzu.

Today, in the wake of President Trump’s imposition of tariffs against China, I turn to the American philosopher Bugs Bunny: “Of course, you know this means war.”

War indeed appears likely — a destructive trade war — as President Trump makes good on his promise to put “America First” and punish the Chinese for alleged cheating in global trade.

The main stock indices plummeted Thursday, after the president announced tariffs and penalties of as much as $60 billion on Chinese imports.

Unlike previous sessions, there was nothing choppy about trading today. At the opening bell, investors ran for the exits and never looked back. The Dow Jones Industrial Average, the S&P 500 and the Nasdaq closed deeply in the red. All the major averages are lower for the week. The CBOE Volatility Index (VIX), aka “fear index,” today jumped more than 30%.

The vast majority of economists decry tariffs as dangerous. Of course, you’ll find a few pseudo-economists on CNBC who’ll defend tariffs. One of them just got hired by the White House. But economic experts who actually know what they’re talking about condemn protectionism. They say tariffs raise the cost of goods, reduce output, destroy jobs, and exacerbate geopolitical tensions. History proves their case.

Trump’s new tariffs target Chinese high-tech products, but they also affect imported Chinese goods in more than 100 categories, including clothing, shoes and consumer gadgets.

Previously announced tariffs on steel and aluminum are scheduled to go into effect Friday. The administration said today that it would exempt the European Union, South Korea, Brazil, Canada, and Mexico from tariffs on the metals.

Trump today alleged that Beijing has forced U.S. firms to transfer their intellectual property to China as a cost of doing business there. Fact is, though, many other nations insist on similar arrangements, known as “offsets.” The White House is pressing China to reduce its $375 billion trade surplus with the U.S. by $100 billion.

Republican leaders in Congress strongly oppose the president’s protectionism, opening a rift between Trump and the establishment wing of his party. Most Democrats oppose the tariffs, too.

Some lawmakers on Capitol Hill today accused Trump of hypocrisy, noting that as a real estate developer Trump bought cheap Chinese steel and aluminum for his buildings. They also noted that many Trump-branded products are made in sweatshops overseas, including China. But Wall Street cares little about such distinctions. What matters to traders is how these tariffs will hurt corporate bottom lines and disrupt global trade.

Technology stocks were among the hardest hit today. The tech sector also is reeling from the unfolding Cambridge Analytica scandal, in which the data mining firm stands accused of stealing the personal data of 50 million Facebook (NSDQ: FB) users.

Cambridge Analytica allegedly used the data to operate disinformation campaigns at the behest of Trump and conservative causes. The hashtag #DeleteFacebook was trending on Twitter today, as tens of thousands of people outraged over the privacy breach deleted their Facebook accounts. The fear among investors is that the widening controversy will result in tighter regulation of the tech sector.

FB fell 2.66% today; the stock is now down 15% from its 52-week high. Over the last four days, the social media giant has lost more than $50 billion in market value.

The U.S. and China: tit-for-tat…

China on Thursday vowed countermeasures. The Middle Kingdom said it would target politically sensitive states in the Republican camp that Trump won in the 2016 election.

U.S.-made products on China’s hit list include motor cycles made by Harley-Davidson (NYSE: HOG) in Wisconsin, aircraft made by Chicago-based Boeing (NYSE: BA), tobacco grown in North Carolina, bourbon distilled in Kentucky, and soybeans grown in Iowa.

U.S. agricultural exports to China reached $19.6 billion last year, with soybean shipments accounting for $12.4 billion.

Industrial stocks got clobbered today as well, particularly Boeing. The aircraft maker commands the biggest market share in China and was expecting China to buy more than 7,000 Boeing jets worth $1.1 trillion into 2036. BA today slumped 5.21%.

President Trump has tweeted that trade wars are “good” and “easy to win.” The protectionists in the administration must have skipped economics class on the day that Smoot-Hawley was taught.

A quick refresher course. Sponsored by Senator Reed Smoot and Representative Willis C. Hawley, the Tariff Act of 1930, commonly known as Smoot-Hawley, was signed into law by President Herbert Hoover on June 17, 1930. The act raised U.S. tariffs on over 20,000 imported goods.

The tariffs sparked a ruinous global trade war that sank the world deeper into a depression that lasted 10 years. What eventually got the world out of the Great Depression? Demand for production workers caused by the outbreak of World War II.

Hoover spurned a petition to the White House from more than 1,000 economists urging him to veto the legislation. Likewise, Trump today ignored the pleas of the financial community to not follow through on his tariffs.

The deeper problem here is that trade wars often erupt into shooting wars. Stay cautious. Investors face perilous times.

Thursday Market Wrap

• DJIA: -2.93% or -724.42 points to close at 23,957.89
  
• S&P 500: -2.52% or -68.24 points to close at 2,643.69
  
• Nasdaq: -2.43% or -178.61 points to close at 7,166.68
  

Thursday’s Big Gainers

• Guess? (NYSE: GES) +28.25%

Retailer beats on earnings.

• Pandora Media (NYSE: P) +7.85%

Internet radio firm buys adtech start-up.

• Yext (NYSE: YEXT) +4.81%

Analysts bullish on software developer.

Thursday’s Big Decliners

• AbbVie (NYSE: ABBV) -12.76%

Biotech reports disappointing results for cancer drug.

• Vipshop Holdings (NYSE: VIPS) -9.85%

Growth sputters at China-based ecommerce platform.

• JinkoSolar Holding (NYSE: JKS) -7.92%

Solar component firm’s margins slide.

Letters to the Editor

“Tech stocks are getting hit by Trump’s tariffs. Does the administration have any good news for Silicon Valley?” — Matt D.

The new tax bill offsets the pain of trade restrictions by allowing cash hoards repatriated from overseas to get taxed domestically at a lower rate.

That’s a huge shot in the arm for Silicon Valley firms that are parking a lot of cash overseas. Repatriation would prompt them to launch a wave of mergers and acquisitions.

This activity would in turn fuel innovation, organic growth and earnings. That’s the theory, anyway. We’ll see how it pans out.

What are your views on tariffs? I’d like to hear them: mailbag@investingdaily.com

John Persinos is managing editor of Personal Finance and chief investment strategist of Breakthrough Tech Profits.