Two days after President Trump announced widespread tariffs around the world, the United States faces a widespread rebound as China retaliates against U.S. goods and markets again over fears of a persistent, harmful trade war.
On Saturday, Mr. Trump began levied almost comprehensive taxes on imports, a potentially expensive trade conflict the president strongly defended, marking the first Salvo.
Mr. Trump has reached 20% tariffs and China has announced plans for retaliation. Beijing has pledged a 34% tariff on U.S. goods next week, including agricultural products. China calibrated the rate of Mr. Trump's decision to increase the tax on import tax to China by 34%.
Tit-for-Tat has dealt a huge blow to financial markets, and as Wall Street believes, the chances of a global trade deadlock continue to escalate. By the closing ceremony, the S&P 500 fell nearly 6%, bringing it closer to a bear market, a widely used Wall Street semester, with its peak dropping by at least 20%. Nasdaq High Technology's Nasdaq fell 5.8%, pushing it to bear territory.
World Trade Organization Director-General Ngozi Okonjo-Iweala targeted the United States and warned on Friday that “the cycle of retaliation measures has led to a further decline in trade.” In the United States, Fed Chairman Jerome H. Powell (Jerome H.
“Although uncertainty remains rising, it is becoming increasingly clear now that tariff increases will be much larger than expected,” Powell said. “The economic impact may be so, which will include higher inflation and slower growth.”
But Mr. Trump responded to the chaotic days by waving his provocative tone. From Washington to Mar-A-Lago, he announced the truth from his home in Florida: “My policies will never change.”
Instead, the president insisted in another article that his strategy had “already worked” as he presented a new and more than expected job report, reflecting the increase in recruitment in the month before the tariffs were announced.
At one point, the president even radiated another user's video that argued that “Trump deliberately collapsed the market” to force the Fed to lower interest rates. Later, he called on Mr. Powell to do so, demanding that the independent president of the central bank “stop playing a political role.”
Mr. Trump eventually turned his attention to China and attacked the country because he “made mistakes” by retaliating against the United States. The president and his aides have previously said that other countries may raise tariff rates if they wish to make exact retribution for U.S. goods.
The global scramble emphasizes in many ways the weight of Mr. Trump’s tariffs and the importance of his grand aspiration to recalibrate the global trading system. The White House believes that these taxes are crucial to resetting U.S. trade relations, which the president believes is unfair, while promoting U.S. manufacturing and boosting new revenues.
However, tariffs on imports could seriously affect businesses that may face new costs for producing goods. This, in turn, could hammer consumers, who could bear any burden of price increases. Economists generally believe that the result may be a rise in inflation, a slowdown in consumer spending and business investment, which together have driven down U.S. growth and plunged the economy into recession.
“The market is not confident in the new tariff regime,” said Joe Brusuelas, chief economist at consulting firm RSM Consulting. He added that Mr Trump's comments on Friday “only exacerbated the shock and fears there is no strategic roadmap.”
But Mr. Trump and his senior aides have beaten these Duer’s predictions in recent days. In cable news, they have refuted the market’s ebb and flows and acknowledged that tariffs could cause short-term economic pain, which the president likened to the painful but necessary medical operations of “pathological” patients.
The government and its conservative allies have also worked to shift the criticism of economists, repeatedly portraying them as opponents who have misjudged the president’s agenda in the past.
“I think the remarks in the economic world, especially, are almost entirely ideological and disproportionate to the actual risk-reward calculations,” said Oren Cass, chief economist at American Compass, a conservative economic think tank.
Global leaders, American politicians and others rejected the view, saying Mr. Trump’s attitude threatened to weaken the global economy and make prices soar, as much of the world finally returned to balance after two years of rapid inflation.
WTO Director Ms Okonjo-iweala warned in a statement Friday that Trump's policy “could cause an overall contraction of global commodity trade volumes to be about 1% this year, a drop of nearly four percentage points from previous forecasts.”
California said it will try to negotiate its own trade deal as Democratic Gov. Gavin Newsom seeks to protect local agriculture and other businesses. Mr Newsom said in a statement that the president's strategy will be “a profound way for real people, including those who voted for Donald Trump, are now betrayed by this administration.”
Even video games can’t get rid of the competition: Japan’s Nintendo announced that it will delay its widely expected upcoming console, the Switch 2, as it needs to “assess the potential impact of tariffs and evolving market conditions.” Mr Trump said Japan's exports to the United States would face 24% tariffs.
Some foreign governments also engaged in last-minute battles to figure out how or whether to retaliate, while trying to convince Washington to relax its upcoming import tax.
EU Trade Commissioner Maros Sefcovic said on Friday that he had a “candid” exchange with Mr. Trump's trade messenger and posted on social media site X, “I'm very clear: our tariffs are hurting and unreasonable.”
Earlier on Friday, Mr. Trump said he had spoken over the phone with Vietnamese Communist Party Secretary-General Lam, who will start exporting 46% tariffs to the United States next week. Mr. Trump's remarks that Vietnam “will hope to lower tariffs to zero if it can reach an agreement with the United States,” the president did not say clearly whether he would accept such a deal.
The Trump administration has sent a different signal to willingness to make a deal: Some of Mr. Trump's advisers said they don't intend to bargain, but the president himself told reporters earlier this week that he could be willing to accept negotiations if the U.S. receives some “phenomenon” in exchange for a relaxation of tariffs.
Reported by Anna Swanson,,,,, Laurel Rosenhall,,,,, Colby Smith,,,,, Zachary Small and Keith Bradsher.
