Trump Administration Live Updates: Markets Wobble as China Tariffs Deepen U.S. Trade War
Where Things Stand
Trade fight deepens: President Trump’s trade war with China intensified on Monday as Beijing began imposing retaliatory tariffs on a range of American farm products, including chicken, wheat and corn. Investors worried about the health of the American economy and the destabilizing effects of Mr. Trump’s disputes with crucial trading partners sent global stock markets falling again, a day after he did not rule out the possibility that his policies could cause a recession. The S&P 500 was down more than 1.5 percent in early trading.
Ukraine-Russia war: President Volodymyr Zelensky of Ukraine was scheduled to meet with Crown Prince Mohammed bin Salman of Saudi Arabia on Monday, a day before planned talks between Ukrainian and American officials in the kingdom. Mr. Zelensky is working to repair his strained relationship with the United States and secure a favorable deal to end his country’s war with Russia. Read more ›
Iran’s nuclear program: A day after Iran’s supreme leader appeared to reject an overture from Mr. Trump to discuss its nuclear program, Tehran signaled that it was open to speaking with the United States if the talks were restricted to military concerns. Any such talks “may be subject to consideration,” Iran’s mission to the United Nations said in a social media post on Sunday. It was unclear if the comments represented a shift in policy. Read more ›
Secretary of State Marco Rubio announced on Monday that after a six-week review, the Trump administration was canceling 83 percent of the programs run by the U.S. Agency for International Development. Rubio, making the announcement on his personal account on X, said that the remaining programs, of which he said there were approximately 1,000, would now be administered by the State Department. The Trump administration had already largely dismantled U.S.A.I.D., which had been responsible for distributing foreign assistance to developing countries.
“The 5200 contracts that are now cancelled spent tens of billions of dollars in ways that did not serve, (and in some cases even harmed), the core national interests of the United States,” Rubio said. U.S.A.I.D. has long been a target for conservative critics who have questioned the value of foreign aid. After Rubio clashed with Elon Musk at a cabinet meeting last week, he thanked Musk’s Department of Government Efficiency and “our hardworking staff who worked very long hours to achieve this overdue and historic reform.”
Concerns about the health of the U.S. economy dragged down stock markets on Monday, amid ongoing whiplash from tariff policies and ahead of fresh inflation data set to be released this week. The S&P 500 was down about 1.5 percent at the start of trading, while the tech heavy Nasdaq Composite fell roughly 2 percent, extending last week’s losses. In an interview that aired on Sunday, President Trump refused to rule out the possibility of a recession, stating that the economy is undergoing “a period of transition.”
Advertisement
SKIP ADVERTISEMENT
Elon Musk’s growing political power and his shift to the hard right have ignited protests in the United States that are hitting his companies. That is also playing out in Europe, where antipathy to Musk is denting Tesla sales, and may now threaten his Starlink satellite internet business.
Questions about Starlink’s role in the Ukraine war have ignited a fight between Musk and the Polish government that played out over social media this weekend, and has spurred a huge rally in the shares of a European rival. Today’s DealBook newsletter asks how Musk’s politics may be damaging his business empire in Europe.
Stock markets fell further on Monday as investors around the world worried about the health of the American economy and businesses braced for the destabilizing effects of tariffs on global trade.
The S&P 500 fell 1.5 percent at the start of trading on Wall Street, adding to last week’s losses, which were the steepest in several months. After three straight weeks of selling, the index is now about 7 percent below a record set last month, approaching a “correction,” a Wall Street term for a significant decline from a recent high.
The tech-heavy Nasdaq has been hit particularly hard. It fell into a correction last week, and dropped another 2 percent on Monday. Tesla’s shares fell more than 5 percent, Alphabet lost 4 percent and Nvidia slipped more than 2 percent.
Stocks in Europe and Asia also came under pressure. An index tracking the eurozone’s largest public companies, which hit a record high last week, dropped 0.9 percent. Hong Kong’s Hang Seng Index fell more than 1.8 percent.
Investors seeking havens continued to opt for the relative safety of bonds, pushing down the 10-year U.S. Treasury yield to 4.24 percent. (Bond prices move inversely to yields.) The combination of falling stocks and declining interest rates is often seen as a sign of economic unease.
In a Fox News interview that aired on Sunday, President Trump refused to rule out the possibility that his policies would cause a recession.
Over the past few weeks, Mr. Trump has threatened, imposed, suspended and resumed tariffs on America’s largest trade partners: Canada, Mexico and China. The dizzying shifts, including last-minute exemptions for some automakers and energy products, have led to heightened uncertainty, unnerving investors.
“The market volatility is much less about the bad news of tariffs and much more about the uncertainty of tariffs, especially uncertainty as to what the policy is, where it is headed, how long it will last and what the end result will be,” said David Bahnsen, the chief investment officer at the Bahnsen Group.
By most measures, the U.S. economy is still solid, with the latest data on hiring holding steady. But economists have turned gloomier as they come to grips with Mr. Trump’s seesawing approach to tariffs, which have hamstrung businesses trying to plan investments and hiring. Cuts to the federal work force and government spending freezes have also dented consumer sentiment.
Analysts at JPMorgan Chase said in a report that there was a “materially higher risk” of a global recession this year because of “extreme U.S. policies.” They put the probability of such a downturn at 40 percent. Strategists at Goldman Sachs increased the chances of a U.S. recession in the coming year to 20 percent, citing “policy changes as the key risk.”
On Monday, retaliatory tariffs by China on U.S. agricultural products came into effect. On Wednesday, the Trump administration is set to put in place a 25 percent tariff on all steel and aluminum imports. Mr. Trump has also threatened to impose “reciprocal tariffs” on all U.S. imports to match other countries’ tariffs and trading policies next month.
Global stock markets fell on Monday as investors worried about economic growth, the destabilizing effect of tariffs and President Trump’s refusal to rule out that his policies could cause a recession. Futures for the S&P 500 index fell more than 1 percent this morning, suggesting that the sharp losses that rocked U.S. stock markets last week were set to continue.
As they have in recent weeks, investors looking for safe havens opted for bonds, pushing down the 10-year U.S. Treasury yield in early trading.
Advertisement
SKIP ADVERTISEMENT
Reporting from Tokyo
Japanese officials are visiting Washington this week to negotiate with the Trump administration ahead of sweeping U.S. tariffs that are set to affect exports, including metals and cars, from Japan and a number of other countries.
Japan’s trade minister, Yoji Muto, is scheduled to meet with Commerce Secretary Howard Lutnick on Monday, according to a person familiar with the official’s itinerary who requested anonymity to discuss plans that could still change. Japan’s public broadcaster NHK also reported on the details of the meeting.
The meeting is expected to take place two days before the United States is set to impose a 25 percent tariff on all steel and aluminum imports. In addition to seeking exemptions from these tariffs, Mr. Muto is expected to request relief from a potential 25 percent tariff on foreign cars — a measure President Trump has indicated could take effect as soon as April 2.
Of all those measures, the auto tariffs would hit Japan’s economy the hardest. Automobiles are the country’s largest export, and the United States is their top destination. Analysts say that Japan and South Korea, another major car manufacturer, are likely to be most heavily impacted by the policy.
At a news conference on Friday, Mr. Muto said he hoped to establish a “win-win” relationship with the United States during his visit this week. Given the central importance of the auto industry to Japan’s economy, he said, “our main request to the United States is that we continue to build industries together.”
Japan has been considering using potential investments in a $44 billion plan to produce and export natural gas from Alaska as a negotiating tool with the United States. When President Trump addressed Congress last week, he said that Japan and South Korea want to work with the United States on the long-stalled project, known as Alaska L.N.G.
A spokeswoman for Japan’s economy ministry declined to comment on the specifics of Mr. Muto’s meetings or their timing.
Kiuko Notoya contributed reporting.
Iran has signaled that it is open to talks about its nuclear program with the United States if they are restricted to military concerns, a day after the country’s supreme leader had appeared to reject an overture from President Trump to hold discussions.
“If the objective of negotiations is to address concerns vis-à-vis any potential militarization of Iran’s nuclear program, such discussions may be subject to consideration,” Iran’s mission to the United Nations said in a social media post on Sunday.
It was unclear if the comments represented a shift in policy after Ayatollah Ali Khamenei, Iran’s supreme leader who has ultimate authority in such matters, issued an angry statement following Mr. Trump’s offer last week to restart talks.
In a social media post on Saturday, Mr. Khamenei decried “bullying governments” that seek to impose restrictions on Iran. The remarks did not refer directly to Mr. Trump or his offer. The president had warned that Tehran would have to choose between curbing its nuclear program or risk losing it in a military attack
Experts say Iran is at the threshold of being able to enrich enough uranium to produce a nuclear weapon. The Islamic republic says its nuclear program is for peaceful purposes.
Iran’s U.N. mission said that “negotiations will never take place” if their aim is to dismantle Tehran’s “peaceful nuclear program.”
The apparently conflicting remarks may reflect a split among Iranian officials about whether to re-enter talks after Mr. Trump, during his first term as president, withdrew the United States from the nuclear deal struck with Tehran by his predecessor, Barack Obama.
Some moderate and reformist Iranian leaders, including President Masoud Pezeshkian, who took office last year, have said they want to begin discussions. Mr. Khamenei, however, has the final say and has said that Iran cannot trust the United States.
Mr. Trump’s offer comes as the strategic environment for Iran has deteriorated substantially.
Israel has severely weakened Tehran’s regional proxies, Hezbollah and Hamas, and destroyed almost all the air defenses protecting Iran’s nuclear facilities. In December, a rebel coalition toppled Syria’s former authoritarian ruler, Bashar al-Assad, an ally of Tehran.
Some senior Israeli officials have argued that there will never be a better moment to strike at Iran’s major nuclear facilities.
Advertisement
SKIP ADVERTISEMENT
President Volodymyr Zelensky of Ukraine, working to repair his strained relationship with the United States and secure a favorable deal to end his country’s war with Russia, was scheduled to meet on Monday with Crown Prince Mohammed bin Salman in Saudi Arabia.
The meeting between Mr. Zelensky and Prince Mohammed, the de facto Saudi leader, who has sought to take a central role on the world’s diplomatic stage, comes ahead of talks planned for Tuesday between Ukrainian and U.S. officials in the oil-rich Gulf state.
“Ukraine has been seeking peace since the very first second of the war, and we have always said that the only reason it continues is Russia,” Mr. Zelensky wrote Monday on social media before his meeting with Prince Mohammed.
Once shunned internationally because of accusations of human rights abuses that he has denied, the crown prince has positioned his country as a middleman in efforts to end the Russia-Ukraine war. Last year, Saudi Arabia played a pivotal role in a complex U.S.-Russia prisoner swap, and President Trump has suggested it could be the site of a possible meeting between him and President Vladimir V. Putin of Russia.
Last month, Mr. Zelensky postponed a trip to Saudi Arabia after it hosted an extraordinary meeting of the U.S. secretary of state, Marco Rubio, and his Russian counterpart, Sergey V. Lavrov, in which the two sides sought to reset their relationship and discussed the war in Ukraine, without Mr. Zelensky.
But on Saturday, Mr. Zelensky said on social media that he would visit Saudi Arabia, declaring that he was “determined to do everything to end this war with a just and lasting peace.”
“Realistic proposals are on the table. The key is to move quickly and effectively,” he wrote.
Mr. Zelensky added that he would not attend the talks with U.S. officials, saying that the Ukrainian delegation would include the country’s foreign and defense ministers, a top military official and his chief of staff.
The Ukrainian president is under intense pressure from the Trump administration to agree to a peace deal, and he has appeared to recalibrate his message after Mr. Trump and Vice President JD Vance angrily assailed him 10 days ago in the Oval Office over what they described as a lack of gratitude for U.S. support.
Mr. Trump has repeatedly said that Mr. Zelensky does not “have the cards” given Russia’s military strength, and has all but demanded that Ukraine accept diplomatic terms set by the United States for a resolution of the war. Still, there are signs that Ukraine’s position on the battlefield is improving: Ukrainian troops have in recent months stalled a Russian offensive and in some places won back small patches of land.
Steve Witkoff, the Trump administration’s special envoy to the Middle East, has said that Mr. Zelensky’s deferential posture after the blowup in the White House has improved Ukraine’s standing with American officials. Nonetheless, the U.S. has paused military support for Ukraine.
Mr. Zelensky wrote on Saturday that he was “fully committed to constructive dialogue” and that he hoped to “discuss and agree on the necessary decisions and steps” during his visit to Saudi Arabia. Mr. Rubio will be in the seaside Saudi city of Jeddah for talks with Ukrainian officials from Monday through Wednesday, according to the U.S. State Department, and was expected to meet with Prince Mohammed after arriving on Monday evening.
Mr. Trump’s position on Russia and Ukraine has sometimes been hard to pin down. On Friday, he said on social media that he was considering significant sanctions on Russia to help force a peace deal on Ukraine. He demanded that the two countries “get to the table right now, before it is too late.”
Hours later, he told reporters at the White House that he felt talks with Russia were going well and that he was “finding it more difficult, frankly, to deal with Ukraine.”
For Prince Mohammed, acting as a mediator in the war is an opportunity to solidify his influence beyond the Middle East. Saudi Arabia has avoided taking sides in the conflict and in August 2023, the kingdom hosted a conference in Jeddah with representatives of more than 40 countries to discuss pathways to peace. Ukraine said those consultations were “fruitful,” but Russia, which had not been invited, was dismissive of the meeting.
Ismaeel Naar contributed reporting.
Beijing began imposing tariffs on Monday on many farm products from the United States, for which China is the largest overseas market. It is the latest escalation of a trade fight between the world’s two largest economies.
The Chinese government announced the tariffs last week, shortly after President Trump raised tariffs on Chinese products for the second time since he took office in January. The Chinese tariffs will include a levy of 15 percent on U.S. products like chicken, wheat and corn, as well as 10 percent on products like soybeans, pork, beef and fruit.
Beijing said that goods that had already been shipped before Monday and imported by April 12 would not be subject to the new tariffs. Because crops like soybeans, wheat and corn, in particular, tend to travel by sea, this means that China’s customs officials will actually collect few tariffs until shipments arrive in China after leaving the United States on Monday or later.
A spokesman for the National People’s Congress, which is now holding China’s annual legislative session, said last week that Mr. Trump’s latest tariffs had “disrupted the security and stability of the global industrial and supply chains.”
The Chinese government also said it was blocking 15 U.S. companies from buying Chinese products unless it granted special permission, including a manufacturer of drones that supplies the U.S. military. And it said it was blocking another 10 U.S. companies from doing business in China.
Mr. Trump has contended that tariffs are needed on imports from China, most of which are manufactured goods, to allow the United States to rebuild its industrial sector and also to generate tax revenue for the federal budget. He imposed a 10 percent tariff on almost all imports from China in early February, and raised the tariff to 20 percent last week. He has said the actions were intended partly to pressure China to reduce the flow of the opioid fentanyl into the United States.
Mr. Trump also imposed 25 percent tariffs on Canada and Mexico last Tuesday, though he abruptly suspended many of those levies two days later.
He has added 20 percent tariffs to the roughly $440 billion worth of Chinese goods that the United States imports annually. The average U.S. tariff on affected Chinese goods now stands at 39 percent, up from 3 percent when Mr. Trump began his first term eight years ago. Other than China, Canada and Mexico, the United States collects tariffs averaging about 3 percent on most countries.
Despite the recent escalations in the trade war between Washington and Beijing, both sides have signaled that they may be open to a compromise. Last week, China’s commerce minister told reporters that he had invited his American counterpart and the U.S. trade representative to a meeting. And last month, Mr. Trump said that a new trade deal with China was “possible.”
Monday’s levies are not the first time in recent weeks that China has responded in kind to Mr. Trump’s trade actions. After the president imposed 10 percent tariffs in early February, China said it would place tariffs on natural gas, coal and farm equipment purchased from the United States.
But the United States has more targets in a trade war because Americans purchase far more goods from China than the Chinese purchase from Americans. This enabled the United States to one-up China relatively easily after China imposed reciprocal tariffs on U.S. goods during Mr. Trump’s first term.
But Mao Ning, a spokeswoman of the Ministry of Foreign Affairs, contended at the ministry’s daily briefing on Monday that nobody should be imposing extra tariffs. “Trade wars and tariff wars all start with harming others and end with harming oneself — the United States should learn lessons and change its course,” she said.
China faces a more troubled domestic economy now than during President Trump’s first term. It is hamstrung by economic problems including weak foreign investment and the aftermath of a real estate bust.
Still, China has other tools for managing the ongoing trade skirmish. In the past, it has cut taxes on Chinese companies that export goods to the United States, enabling them to cut prices and dampen the effects of a U.S. tariff.
Chinese companies have also moved final assembly of their products to countries like Vietnam and Mexico, with which the United States has had relatively free trade relations in recent decades. But Mr. Trump has tried to tighten this loophole by threatening tariffs on Mexico.
And Chinese companies have sought to exploit the so-called de minimis rule, which exempts packages from tariffs if their value is $800 or less. Mr. Trump has tried to crack down on this practice, but the crackdown proved complicated to execute, and Mr. Trump has largely paused the effort.
Zixu Wang contributed research from Hong Kong.
Advertisement
SKIP ADVERTISEMENT
A group of Native American tribes and students is suing the Trump administration to reverse its recent firing of federal workers at Native schools that they said has severely lowered their quality of education.
The firings, part of the series of layoffs led by the Department of Government Efficiency that have cut thousands of federal jobs since January, included nearly one quarter of the staff members at the only two federally run colleges for Native people in the country: Haskell Indian Nations University in Lawrence, Kan., and Southwestern Indian Polytechnic Institute in Albuquerque.
Instructors, a basketball coach, and security and maintenance workers were among those who were fired or forced to resign in February. Although the total number of layoffs was not clear on Sunday, the reductions also included employees at the central and regional offices of the Bureau of Indian Education, a federal agency. Some staff members, but not all, have been rehired, according to a statement from the Native American Rights Fund, which filed the suit on Friday in federal court in Washington. About 45,000 children are enrolled in bureau-funded schools in 23 states.
As a result of the cuts, dozens of courses at the two colleges lost instructors, according to the lawsuit. And because of the loss of support staff and maintenance workers, school dorms were quickly overrun with garbage, students reported undrinkable brown water, dining halls failed to adequately feed students, and widespread power outages hampered students’ ability to study.
“Unfortunately, these firings were done without preparation and without regard to the health and safety of the students, and that is a continuation of a history of neglect and disrespect,” Jacqueline De León, a lawyer for the tribes and students, said. “We are here to fight to make sure that it doesn’t continue.”
Lawyers with the Native American Rights Fund filed the suit against the heads of the Department of the Interior, the Bureau of Indian Affairs and the Office of Indian Education Programs.
Plaintiffs included the tribal nations of the Pueblo of Isleta; the Prairie Band Potawatomi Nation; and the Cheyenne and Arapaho Tribes. Five students from the two colleges are also among the plaintiffs.
A spokesman for the Interior Department, which houses the Bureaus of Indian Education and Indian Affairs, said the department does not comment on pending litigation.
The federal government has a legal obligation, known as the federal Indian trust responsibility, to protect and maintain the special relationship it has with federally recognized tribes.
Included in this obligation, which was supported by federal courts as early as 1831, are requirements to uphold tribal sovereignty, work with tribes on projects and policies that affect them, and respect tribes’ right to make decisions in their own best interest. By not consulting with tribes on the firings, the lawsuit said, the government violated the trust requirement.
“Despite having a treaty obligation to provide educational opportunities to Tribal students, the federal government has long failed to offer adequate services,” Hershel Gorham, the lieutenant governor of Cheyenne and Arapaho Tribes, said in a statement. “Just when the Bureau of Indian Education was taking steps to fix the situation, these cuts undermined all those efforts. These institutions are precious to our communities; we won’t sit by and watch them fail.”
The U.S. government has a fraught history with Native schools. Over more than 150 years, hundreds of thousands of Native children were sent to boarding schools, often after being removed from their homes, to assimilate with non-Native culture. Abuse and neglect were common at the original assimilation schools, and mass graves have been located near such institutions across the country. More than 100 people are buried in one such cemetery at Haskell.
Federal funding of tribal schools has also steadily decreased since 2010, along with the enrollment of Native American and Alaska Native students.
According to the Postsecondary National Policy Institute, a nonprofit research organization, Native American and Alaska Native students account for the smallest ethnic group in the country, making up less than 1 percent of students enrolled in postsecondary schools in 2021, the latest year for which data was available.
Alan Blinder contributed reporting.
Reporting from Washington
Democratic lawmakers on Sunday expressed disappointment at their party’s uncoordinated response to President Trump’s address to Congress last week, criticizing a colleague who staged a one-man protest during the speech by standing up and repeatedly shouting, “No mandate.”
The party’s leadership urged its members last week to stage a solemn and staid protest during Mr. Trump’s Tuesday speech, which was televised to nearly 37 million viewers. But Representative Al Green of Texas heckled the president and eventually was escorted out of the chamber.
The criticisms aimed at Mr. Green come as congressional Democrats debate how much to obstruct Mr. Trump’s agenda. With government funding set to expire after midnight Friday, Democrats must decide whether they will vote for legislation to avert a shutdown or refuse to do so while Mr. Trump is defunding and dismantling Congressionally approved federal programs.
On Sunday news shows, five Democratic lawmakers, including two progressives, made roundabout criticisms of Mr. Green. They pointed to the backlash his protest generated from both Republican and nonpartisan voters, as well as the media attention it created, which they saw as a distraction to Democrats’ messaging against Mr. Trump’s policies.
“That was a strategic mistake as well as something that just is not appropriate for the decorum of the U.S. House of Representatives,” Representative Tom Suozzi, Democrat of New York, said on CBS. Mr. Suozzi, whose district voted for Mr. Trump in 2024, was one of 10 Democrats who voted with Republicans to formally censure Mr. Green on Thursday. A censure is one of the highest forms of reprimand in the House.
Senator Adam Schiff, Democrat of California, said on ABC that Democrats’ “lack of coordinated response” was “a mistake” and that his party should have focused on how the Republican plan to slash government spending may lead to cuts on Medicaid.
“That, to me, is the winning case to make,” he said.
Senator Elissa Slotkin, Democrat of Michigan, who delivered her party’s response to Tuesday’s address, acknowledged on NBC’s “Meet the Press” that Mr. Green’s outburst was the result of “so much frustration” with the Trump administration.
But Ms. Slotkin quickly added that her approach differs strongly from Mr. Green’s.
“We can’t just be against something,” said Ms. Slotkin, a moderate Democrat who won in November in a state that Mr. Trump carried. “We have to be for something.”
Those lawmakers’ comments largely echoed the views of the Democratic leadership, which had hoped that a soberly delivered response on pocketbook and health care issues would become the news instead of Mr. Green’s dissent.
When pressed about Mr. Green’s protest, Representative Hakeem Jeffries, Democrat of New York and the House minority leader, on Wednesday said that “the vast majority of Democrats showed restraint, listened to what the president had to say and of course we strongly disagree.”
Senator Chuck Schumer of New York, the Senate minority leader, said on Wednesday that his party needed to focus on delivering messages around economic issues such as rising costs of food, housing and gas, and suggested that Mr. Green’s form of protest was not “the best way.”
Even Mr. Green’s progressive colleagues in Washington remained critical of him on Sunday.
Senator Andy Kim of New Jersey said on CNN that lawmakers on both sides of the aisle needed to hold themselves to a higher standard of decorum. Mr. Kim said he did not approve of “that type of behavior” and compared Mr. Green’s response to that of Representative Marjorie Taylor Greene, Republican of Georgia. Ms. Greene, a far-right firebrand, routinely interrupted former President Joseph R. Biden’s speeches to Congress.
Representative Ro Khanna of California went further and told Fox News that Tuesday’s scattered response was “not a good look” for Democrats and the fallout from Mr. Green’s behavior was “a distraction” from Democrats’ economic messaging.
“You can vigorously disagree as I do but still respect some of the institutions of our country and some of our traditions,” Mr. Khanna said.
On Thursday, Mr. Green defended his behavior and made the case for Democrats to engage in “righteous indignation and righteous incivility” in the face of Mr. Trump’s language, tactics and attempts to circumvent Congress.
“There comes a time when you cannot allow the president’s incivility to take advantage of our civility,” he said on the House floor after the censure vote, adding, “It is time for us to take that stand.”
Mr. Green, who is Black, also put his protest in the context of the civil rights movement.
“I remember what it took to get me in this House — I’m not here because I’m so smart,” he said. “I’m here because people made great sacrifices, and it was incivility, it was disruption.”
Maya C. Miller contributed reporting.
Advertisement
SKIP ADVERTISEMENT
President Trump declined in an interview aired Sunday to rule out the possibility that his economic policies, including aggressive tariffs against America’s trade partners, would cause a recession.
In the interview with Maria Bartiromo, the host of “Sunday Morning Futures” on Fox News, Mr. Trump also said that he was considering increasing tariffs against Mexico and Canada. The interview took place on Thursday at the White House.
Referencing “rising worries about a slowdown,” Ms. Bartiromo asked Mr. Trump: “Are you expecting a recession this year?”
“I hate to predict things like that,” Mr. Trump responded. “There is a period of transition, because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing, and there are always periods of, it takes a little time. It takes a little time, but I think it should be great for us.”
Mr. Trump’s imposition of sweeping tariffs on Canada, Mexico and China last week rocked stock markets and invited pushback from industries, including the largest automakers, who told the president that the duties would decimate their business. Canada immediately retaliated with tariffs on $20.5 billion worth of American exports and threatened additional measures. China has also placed tariffs on U.S. goods and plans to impose another round on Monday.
On Thursday, Mr. Trump abruptly reversed his 25 percent tariffs on many Canadian and Mexican exports.
But the president is planning more tariffs soon — increasing the odds of an economically damaging global trade war. On Wednesday, his administration is set to put in place a 25 percent tariff on all foreign steel and aluminum, which he previewed last month. And the president has said to expect further levies on April 2, when he plans to impose what he is calling “reciprocal tariffs” to answer back to other countries’ tariffs and other trading practices.
Ms. Bartiromo told Mr. Trump that business leaders appreciate certainty: “The public companies want to make sure that we have clarity after April 2, when those reciprocal tariffs go in. Are you going to change anything after that? Will we have clarity?”
“We may go up with some tariffs. It depends. We may go up. I don’t think we’ll go down, or we may go up,” Mr. Trump said. “They have plenty of clarity. They just use that. That’s almost a sound bite. They always say that we want clarity. Look, our country has been ripped off for many decades, for many, many decades, and we’re not going to be ripped off anymore.”
Economists have turned gloomier on the economic outlook amid Mr. Trump’s dizzying approach to tariffs, which has fueled considerable uncertainty and hamstrung businesses considering new investments and hiring. The concern is that the ongoing volatility chills this activity even further, intensifying an economic slowdown that is already underway.
Heading into Mr. Trump’s second term in the White House, the economy had downshifted to a more modest pace of growth, the labor market had cooled and inflation, although still sticky, was well off its 2022 peak. The economic backdrop is still solid by many metrics, but policies like tariffs, deportations and steep government spending cuts that are central to Mr. Trump’s economic agenda are expected to test that resilience.
Tariffs, for example, are broadly expected to raise prices for everyday goods while also dampening growth as businesses and consumers are forced to redeploy resources and cut back on spending elsewhere. Elevated inflation has limited to a degree how much the Federal Reserve may be able to support the economy if conditions deteriorate. For the time being, the central bank has opted to keep interest rates on hold at 4.25 percent to 4.5 percent.
Jerome H. Powell, the Federal Reserve chair, reiterated on Friday that the Fed was not in a “hurry” to lower interest rates because the economy remained in good shape, but acknowledged the potentially disruptive nature of Mr. Trump’s plans, especially on inflation.
Lackluster growth combined with rising prices has stoked fears of stagflation, a toxic combination that would put the Fed in an even more difficult position.
In an interview on Friday, Austan D. Goolsbee, president of the Chicago Fed and a voting member on this year’s policy-setting committee, said that such a dynamic was increasingly “on the radar screen,” especially as he heard from companies in his district that they were grappling with an “uncertainty-induced chill.”
Speaking on Meet the Press on Sunday, Howard Lutnick, the commerce secretary, said that tariffs would help “grow our economy in a way we’ve never grown before.”
Asked about forecasts from banks like JP Morgan and Goldman Sachs, who say a recession in the next 12 months has become more likely, Mr. Lutnick said that Americans should not be bracing for a recession.
“I would never bet on recession,” he said. “No chance.”
Mr. Lutnick claimed that the Trump administration’s efforts to reduce government deficits would drive interest rates down, while drilling more oil would also bring down the price of energy. He acknowledged that tariffs could increase the price of foreign goods, but said that domestic goods would get cheaper.
Many economists have expressed other views, saying that tariffs on foreign products can help U.S. companies become more profitable by giving them space to raise their prices, as well.
“Foreign goods may get a little more expensive,” Mr. Lutnick said. “But American goods are going to get cheaper, and you’re going to be helping Americans by buying American.”
Advertisement
SKIP ADVERTISEMENT
Posts
No comments:
Post a Comment