Hypothetical Scenario: Making Money from Tariff News
If someone knew in advance that:
Tariffs would be imposed on April 2, causing markets to fall, and
A 90-day pause (except China) would be announced on April 9, causing markets to rebound...
Then here’s how they could hypothetically profit:
Option 1: Short Selling Before Tariffs
Before April 2, they short-sell stocks or index funds (like the S&P 500).
Market drops after tariffs → they buy back cheaper → profit from the fall.
Option 2: Buy After Market Crash
Once the market drops due to tariffs, they buy in while prices are low.
When the 90-day pause is announced and the market rebounds, they sell at a higher price → profit.
Key Assumption:
This strategy requires foresight — or inside information — which, if obtained unlawfully, would be considered insider trading and is illegal.
Real World Example:
This is similar to what happens around:
Federal Reserve interest rate decisions
Earnings announcements
Geopolitical events
Traders and hedge funds try to anticipate these moves using data, trends, or — in some cases — even leaks (which can be illegal if not public).
Ethical & Legal Note:
If someone had non-public knowledge about Trump's exact tariff timeline, and traded on it, they could face SEC investigation for insider trading.