President Donald Trump’s announcement of sweeping new tariffs triggered the worst day for stock markets in five years on Thursday, sending shockwaves across the nation and in Alabama.
“When you dump over the apple cart, it’s totally expected to have major ramifications,” Retirement Systems of Alabama CEO David Bronner said Thursday in a statement.
Stable markets are important to the RSA, which relies on investments to support pension funds for more than 400,000 active and retired education and government employees.
The RSA said Thursday’s market downturn caused a 2.2% loss on its investments.
That amounted to a loss of $1.055 billion for the RSA’s three defined benefit plans – the Teachers’ Retirement System, the Employees’ Retirement System, and the Judicial Retirement System – the RSA said.
As of September 2024, the RSA was managing 24 funds with assets of $56 billion. The RSA paid $4 billion in benefits in 2024.
The Wall Street Journal reported that stock indexes declined by up to 6% on Thursday and experienced the single largest one-day loss of value since the COVID pandemic arrived in March 2020.
Trump says his tariffs are intended to bring factory jobs back to America and correct what he says are unfair trade policies that hurt the United States.
The tariffs are expected to raise prices in America and spark retaliatory moves by other nations that trade with the United States.
Read more: Trump tariffs hit Alabama businesses, big and small: ‘If I can’t pay it, I have to pass it on’
Bronner, who has previously expressed concerns about Trump’s tariffs and the fast rollout of federal job and funding cuts affecting Alabama, said there are reasons to question the benefits that Trump says are his goal.
“Even though the concept of tariffs might work academically and can work for trading back and forth as a a negotiating tactic, you can’t use it to force companies to make long term commitments (takes 4-5 years to establish a manufacturing plant),” Bronner said.
“Companies can’t commit to that because you are dealing with a man who changes his mind on a regular basis.
“Even if companies were willing to commit, you are punishing the consumer for four to five years while they build the plant.”
Alabama House Speaker Nathaniel Ledbetter, R-Rainsville, said he believes the initial pain caused by the tariffs will lead to the long-term benefits the president has promised.
“I think that the tariffs at some point, we’re seeing it already, are going to bring jobs to the United States of America and back to Alabama,” Ledbetter said. “It may be a bumpy road to begin with.”
Ledbetter noted Hyundai’s announcement that it plans to invest $21 billion in manufacturing operations in the United States.
The company said it “plans to invest in improving its production facilities, including Hyundai Motor Manufacturing Alabama (in Montgomery) and Kia Autoland Georgia, to further enhance its customer-centric approach in delivering high-quality automobiles.”
“The economy is always volatile,” Ledbetter said. “Especially the market. And I feel that pain. All of us do.
“But if we can grow jobs here, if bring them back to Alabama especially, grow them in this country, we’re all going to see that turn around.”
