Trump
Sounds Defiant Note as Tariffs Roil Markets Again
After China
announced new retaliatory measures against the United States, President Trump
responded that Beijing “PLAYED IT WRONG.”
Tony Romm
By Tony Romm
Published
April 4, 2025
Updated
April 5, 2025, 4:37 a.m. ET
Two days
after President Trump announced his expansive global tariffs, the United States
confronted wide-ranging and painful blowback, as China retaliated against
American goods and markets plummeted again on worries of a persistent, damaging
trade war.
No portion
of the global economy appeared unscathed as the world braced for Mr. Trump to
begin imposing his nearly across-the-board taxes on imports Saturday, marking
the first salvo in a potentially costly trade conflict that the president has
vigorously defended.
China, which
Mr. Trump has already hit with 20 percent tariffs, announced plans to
retaliate. Beijing promised to impose a 34 percent tariff on American goods
next week, including on agricultural products. China calibrated its tariffs to
match Mr. Trump’s decision to add a 34 percent tax to Chinese imports.
The
tit-for-tat delivered a huge blow to financial markets, as Wall Street reckoned
with the rising odds of an escalating global trade standoff. By the closing
bell, the S&P 500 had fallen by almost 6 percent, pulling it closer into a
bear market, a widely used Wall Street term for a decline of at least 20
percent from its peak. The tech-heavy Nasdaq fell 5.8 percent, pushing it into
bear market territory.
As China
took aim at the United States, Ngozi Okonjo-Iweala, the director general of the
World Trade Organization, warned on Friday against a “cycle of retaliatory
measures that lead to further declines in trade.” In the United States, Jerome
H. Powell, the chair of the Federal Reserve, struck his own downbeat note over
the unpredictable trajectory of the economy.
“While
uncertainty remains elevated, it is now becoming clear that the tariff
increases will be significantly larger than expected,” Mr. Powell said. “The
same is likely to be true of the economic effects, which will include higher
inflation and slower growth.”
But Mr.
Trump responded to the day of chaos by striking a defiant tone. Having decamped
from Washington to Mar-a-Lago, his home in Florida, he declared on Truth
Social: “MY POLICIES WILL NEVER CHANGE.”
Instead, the
president insisted in another post that his strategy was “ALREADY WORKING,” as
he held up a newly released and better-than-expected jobs report, which
reflected that U.S. hiring increased in the month before the announcement of
his tariffs.
At one
point, the president even circulated another user’s video that argued “Trump is
purposely CRASHING the market,” in a bid to force the Fed to lower interest
rates. He later called on Mr. Powell to do just that, demanding that the
independent chair of the central bank “STOP PLAYING POLITICS.”
And Mr.
Trump eventually turned his attention to China, attacking the country for
having “PLAYED IT WRONG” by retaliating against the United States. The
president and his aides previously have signaled they could ratchet up their
tariff rates if other nations look to exact retribution on U.S. goods.
The global
scramble in many ways underscored the weight of Mr. Trump’s tariffs and the
significance of his grand aspirations to recalibrate the global trading system.
The White House sees these levies as critical toward resetting U.S. trade
relationships, which the president contends are unfair, while boosting U.S.
manufacturing and raising new revenue.
But the
tariffs, which are taxes on imports, threaten to fall hard on businesses that
could face new costs to produce their goods. That, in turn, could hammer
consumers, who are likely to shoulder the burden of any price increases.
Economists widely believe the result could be a rising rate of inflation, and a
slowdown in consumer spending and business investment, which together crimp
U.S. growth and push the economy into a recession.
“Markets are
expressing a vote of no confidence in the new tariff regime,” said Joe
Brusuelas, the principal and chief economist at the consulting firm RSM. He
added that Mr. Trump’s commentary on Friday only “adds to the consternation and
concern that there’s no strategic road map.”
But Mr.
Trump and his top aides have swatted away those dour projections in recent
days. Fanning across cable news, they have dismissed the ebb and flow of the
markets and acknowledged the possibility that tariffs could create short-term
economic pain, which the president has likened to a “sick” patient’s painful
yet necessary medical operation.
The
administration and its conservative allies have also labored to deflect
criticism from economists, repeatedly portraying them as naysayers who had
wrongly judged the president’s agenda in the past.
“I think
it’s very clear the rhetoric of the economic community, in particular, is
almost entirely ideological and out of proportion to the actual sort of
risk-reward calculation,” Oren Cass, the chief economist at American Compass, a
conservative economic think tank, said Friday.
Global
leaders, American politicians and others rejected that view, saying Mr. Trump’s
approach threatened to weaken the global economy and send prices soaring just
as much of the world was finally returning to a sense of balance after two
years of rapid inflation.
Ms.
Okonjo-Iweala, the director general of the W.T.O., warned in a statement Friday
that Mr. Trump’s policies “could lead to an overall contraction of around 1
percent in global merchandise trade volumes this year, representing a downward
revision of nearly four percentage points from previous projections.”
The State of
California signaled it would try to negotiate its own trade deals, as Gov.
Gavin Newsom, a Democrat, looked to protect local agriculture and other
businesses. In a statement, Mr. Newsom said the president’s tactics would be
felt in “pretty profound ways to real people, including those who voted for
Donald Trump and are now being betrayed by this very administration.”
Even video
games could not escape the fray: Japan’s Nintendo announced that it would delay
presales of its widely anticipated upcoming console, the Switch 2, as it cited
a need “to assess the potential impact of tariffs and evolving market
conditions.” Mr. Trump has said Japan will face a 24 percent tariff on its
exports to the United States.
Some foreign
governments also mounted a last-minute scramble to figure out how, or if, to
retaliate, while trying to persuade Washington to relax its coming taxes on
imports.
Maros
Sefcovic, the trade commissioner for the European Union, said Friday that he
had a “frank” exchange with Mr. Trump’s trade emissaries, posting on the
social-media site X, “I was clear: US tariffs are damaging, unjustified.”
Earlier
Friday, Mr. Trump said he had spoken by phone with To Lam, the general
secretary of the Communist Party of Vietnam, which stands to see a 46 percent
tariff on its exports to the United States beginning next week. By Mr. Trump’s
telling, Vietnam “wants to cut their Tariffs down to ZERO if they are able to
make an agreement with the U.S.,” though the president did not explicitly say
if he would accept such a deal.
The Trump
administration has sent mixed signals over its willingness to cut a deal: Some
of Mr. Trump’s advisers have said they do not intend to haggle, but the
president himself told reporters earlier in the week that he could be open to
negotiation if the United States received something “phenomenal” in return for
relaxing tariffs.
Reporting
was contributed by Ana Swanson, Laurel Rosenhall, Colby Smith, Zachary Small
and Keith Bradsher.
Tony Romm is
a reporter covering economic policy and the Trump administration for The Times,
based in Washington. More about Tony Romm
Sem comentários:
Enviar um comentário