A letter to the Securities and Exchange Commission is seeking an investigation into if President Donald Trump’s 90-day suspension of reciprocal tariffs was illegal stock market manipulation.
Trump, before pausing the tariffs he instated on April 2, posted on Truth Social, "This is a great time to buy."
The S&P 500 surged 9.5% on the day the tariff pauses were announced.
Arizona Sens. Mark Kelly and Ruben Gallego, both Democrats, signed the letter, alongside Sens. Adam Schiff, Chuck Schumer and Ron Wyden.
Kelly posted on social media his stance on the tariffs and the fluctuation in the stock market this week. He said the tariff policy will hurt Americans hoping to retire soon.
"Right now, it’s up to my Republican colleagues to get off the sidelines, do their jobs, speak truth to power, tell him that this was a bad plan," Kelly said.
Gallego said Trump’s tariffs and his decision to pause them is causing damage to Arizona’s economy. He references factories pausing their expansion in the state because they are unsure of the future with on-and-off tariffs.
"Trump laid it out very plainly. He told people to buy right before announcing the tariff suspension, so I want to know what he and his people and his friends, his insider friends, were doing before and then and in between that they were able to grossly profit," Gallego said.
Senators say Trump insiders may have profited
Gallego and Schiff demanded detailed information from the White House about any stock trades by adviser Elon Musk and many others in the president’s inner circle who might have known ahead of time about the huge tariffs Trump announced April 2, or that he would abruptly reverse course a week later.
“This sequence of events raises grave legal and ethics concerns,” the senators wrote to White House Chief of Staff Susie Wiles and to Jamieson Greer, the U.S. trade ambassador who also serves as acting head of the Office of Government Ethics.
“The President, his family, and his advisors are uniquely positioned to be privy to and take advantage of non-public information to inform their investment decisions,” the senators’ letter said.
They and other Democrats point to the 18% jump in the share price of electric vehicle maker Tesla after Trump paused the tariffs on Wednesday – and to a sudden surge in trading volume just before that announcement.
Musk owns 12% of Tesla. The Bloomberg Billionaires Index estimated his wealth at $298 billion the day before the pause. The Tesla stake accounts for about half of his wealth, according to Forbes.
When the market rallied on news of the pause, Musk’s portfolio jumped by an estimated $36 billion.
“Trump just showed us a master class in insider trading. This is corruption at the highest level,” Gallego posted Thursday on X – the social media platform that Musk owns.
Gallego’s post includes a reimagined cover of Trump’s 1987 book “Trump: The Art of the Deal,” this one titled “Trump: Art of the Steal.” The original cover photo has been replaced with a portrait that briefly hung in the Colorado state Capitol until Trump demanded its removal, deeming it unflattering and inaccurate.
“It is the responsibility of the President of the United States to reassure the markets and Americans about their economic security in the face of nonstop media fear mongering,” White House spokesperson Kush Desai said in a statement provided to numerous news outlets.
The senators and their aides have provided no evidence of insider trading. But they were hardly the only Democrats alleging insider trading off the tariff upheaval. House Minority Leader Hakeem Jeffries, D-New York, vowed an inquiry.
Democrats cite posts by Trump on his Truth Social platform hours before the pause was announced, calling it a hint for his followers to take financial advantage of the turmoil he had created.
“BE COOL! Everything is going to work out well. The USA will be bigger and better than ever before!” Trump posted. Moments later, he added, “THIS IS A GREAT TIME TO BUY!!! DJT.”
Greer was testifying in his capacity as U.S. trade representative before the House Ways and Means Committee when Trump announced the pause.
“Is this market manipulation?” asked Rep. Steven Horsford, D-Nevada.
“No,” Greer responded. “We’re trying to reset the global trade system.”
“Who’s benefiting? What billionaire just got richer?” Horsford asked.
Gallego’s office said it has no further information when asked for evidence or any basis for their allegations. Schiff is a former federal prosecutor and was the lead House impeachment manager during Trump’s first impeachment trial. His office did not respond.
U.S. markets lost $10 trillion in the three days following Trump’s April 2 tariff announcement. After the pause on Wednesday, the markets surged. The S&P 500 had its best day since 2008, and the Nasdaq skyrocketed 12%.
The day after the announcement, the markets reeled back; the S&P 500 slid 3.5%, the Nasdaq was down 4.3%, and the Dow Jones Industrial Average dropped 2.5%.
For more stories from Cronkite News, visit cronkitenews.azpbs.org.
-
A proposal from Republican Rep. Nick Kupper would, among other things, set up a pilot project on a stretch of I-8 between Casa Grande and Yuma as a “derestricted speed zone” for at least a year. -
A Mesa man has been sentenced to five years in prison and three years probation in connection with the arson of a Tesla dealership in that city last year. -
As Republican lawmakers and Democratic Gov. Katie Hobbs fight over who has the best plan to conform Arizona’s tax code to recent federal adjustments, state officials warned they’ve already issued guidance to taxpayers that differs from both competing proposals. -
Two of Arizona’s congressional Democrats joined forces on Wednesday to talk about housing affordability. Reps. Yassamin Ansari and Adelita Grijalva held a shadow hearing with members of their Progressive Caucus. -
Arizona Democrats have long wanted to place restrictions on corporations and landlords as part of their housing affordability plans. Now Republicans favor some parallel efforts.
