“Structural.”

You’ve probably heard that term bandied about a lot in recent days in the context of the Trump administration’s plans to overhaul a system of global trade and commerce which, let’s not forget, the US quite literally created and shaped to serve its own purposes over seven decades.

That latter point’s important and somehow under-appreciated: We made this for us. Were there unintended consequences? Well, sure, there always are in any endeavor. Do the pitfalls by now, 75 years on, outweigh the legacy benefits? I tend to doubt it, actually, especially if your definition of “legacy benefits” includes everything to do with America’s exorbitant privilege, which Trump’s in the process of destroying, whether he realizes it or not.

A fixture of the commentary this week is the notion that Trump’s dead serious. That he’s going to undertake the riskiest reengineering project in modern history, starting with a wholesale overhaul of the global trade architecture. Things don’t get much more “structural” than that, so I suppose it’s fair to ask if any accompanying bear market in equities might be “structural” in nature too.

If you ask Goldman, the current swoon in US shares (which briefly saw the S&P trade down 20% from its highs earlier this week) is an “event-driven” bear market, not a “structural” bear. If you’re unfamiliar with their framework, Goldman identifies three different types of bears. Here they are, from the latest by Peter Oppenheimer and Sharon Bell:

1. Structural bear markets – triggered by structural imbalances and financial bubbles. Very often there is a ‘price’ shock such as deflation and a banking crisis that follows.
2. Cyclical bear markets – typically triggered by rising interest rates, impending recessions and falls in profits. They are a function of the economic cycle.
3. Event-driven bear markets – triggered by a one-off ‘shock’ that either does not lead to a domestic recession or temporarily knocks a cycle off course. Common triggers are wars, an oil price shock, an EM crisis or technical market dislocations. The principal driver of an event-driven bear market is higher risk premia rather than a rise in interest rates at the outset.

You can actually make a case for any of those currently or, maybe it’s more apt to say you can make a case for all of them in 2025. But for now, Goldman’s going with “event-driven” on the (admittedly plausible) notion that this was a conscious policy decision on the part of the Trump administration — an “own goal,” as some less generous observers have put it recently.

“The event in this case was ‘Liberation Day’ [and] this could be seen as self-inflicted, given the strong prospects for global economic activity at the start of the year,” Oppenheimer wrote.

The table below shows you the history of bear markets, which each classified as either structural (“S”), cyclical (“C”) or event-driven (“E”).

As you can see from the tallies on the bottom rows, you don’t want a “structural” bear. That’s bad. Really, really bad.

Goldman cautioned that the current episode “could easily morph into a cyclical bear market” considering the extent to which the Trump administration’s policies have plainly raised the odds of a recession in the US. The main difference between event-driven and cyclical bears is the duration — the former lasting just eight months, and the latter more than two years on average.

The good news is, Goldman doesn’t see scope for this bear to take a turn for the worst, which is to say they doubt it’ll morph into a “structural” beast. That’s because “more severe bear markets typically are proceeded by much higher private sector leverage than we have now.” Corporate balance sheets, Oppenheimer said, are healthy and banks well capitalized. At the same time, equity valuations, while high, “have not been in bubble territory.” (Write your own jokes, I’m going to refrain.)

The figure above is just an easier-on-the-eyes version of the table. The main takeaway is that if Trump’s “structural” reset were to somehow metastasize into a “structural” bear, we’d be in for — well, a helluva hard time, I’ll just put it that way.

“The average declines are around 60%” in structural bear markets, Goldman went on, adding that they tend to “play out over three years or more, and take a decade to fully recover.”

Now, who’s ready for 104% tariffs on China? They were scheduled for midnight.