Importance Score: 75 / 100 🔴
US Advisers Stand Firm on Tariffs Amid Market Volatility
Amid escalating market concerns and warnings of a potential trade war, advisers to US President Donald Trump have staunchly defended his administration’s imposition of broad import tariffs and affirmed their commitment to maintain the current course. This unwavering stance comes despite significant market fluctuations and widespread calls to avert a trade conflict.
Officials Downplay Market Concerns, Reiterate Tariff Plans
In television appearances, Treasury Secretary Scott Bessent minimized recent stock market declines, while Commerce Secretary Howard Lutnick asserted that reciprocal tariffs would proceed as scheduled. These declarations were made in response to growing anxiety over the economic repercussions of the newly implemented tariffs.
Bessent dismissed fears of a recession stemming from market volatility, characterizing the situation as an “adjustment process.” He stated there was “no reason” to anticipate an economic downturn despite the current turbulence.
Kevin Hassett, another senior advisor, indicated that over 50 nations have contacted President Trump seeking to negotiate trade agreements. This assertion suggests a potential diplomatic strategy behind the tariffs, aiming to leverage trade concessions from other countries.
Stock Markets React Sharply to Trade Policy
On Friday, all three major US stock indexes experienced sharp declines, exceeding 5%, with the S&P 500 plummeting nearly 6%—marking the US stock market’s most significant weekly downturn since 2020. The steep drop reflects investor unease regarding the potential economic impact of the tariffs.
Illustrating ongoing market instability, Saudi Arabia’s stock exchange, trading on Sunday, closed almost 7% lower this week, reporting its largest single-day loss since the pandemic, according to state media outlets. This overseas market reaction underscores the global reach of concerns related to the US trade policy.
Financial institution JP Morgan has projected a 60% probability of both a US and global recession in the wake of President Trump’s tariff announcement. This prediction from a major financial player amplifies fears of wider economic fallout.
Tariffs to Remain in Place, Says Commerce Secretary
Addressing market anxieties, Commerce Secretary Lutnick stated on CBS News Sunday that the 10% “baseline” tariff on all imports, enacted the previous day, would definitively “remain in place for days and weeks.” This confirms the immediate implementation and continuation of the initial tariff measures.
Lutnick further indicated that the more substantial reciprocal tariffs were still on track for implementation. This signals the administration’s intention to proceed with further escalating trade measures.
Higher tariffs targeting approximately 60 countries, identified as “worst offenders,” are scheduled to take effect on Wednesday, April 9th. This targeted approach suggests a strategic focus on specific nations deemed to have unfair trade practices.
In response to queries about these forthcoming tariffs, Lutnick affirmed their implementation, stating “[Trump] announced it and he wasn’t kidding,” reinforcing the President’s resolve on trade policy.
Lutnick also defended tariffs applied to two small Antarctic islands with only penguin populations, explaining it was necessary to close “loopholes” potentially used by countries like China for trade circumvention. This justification highlights the administration’s broad approach to tariff enforcement, extending even to seemingly unconventional targets.
‘Maximum Leverage’ Strategy
Bessent, in a NBC’s Meet the Press interview, contended that President Trump had “created maximum leverage” through these tariffs. He claimed over 50 countries have approached the administration to discuss reducing non-tariff trade barriers, lowering existing tariffs, and ceasing currency manipulation. This positions the tariffs as a tool to achieve broader trade reforms and fairer global trade practices.
Hassett reiterated the assertion that more than 50 countries have communicated their interest in initiating negotiations. Neither Hassett nor Bessent provided specific details regarding the countries involved in these discussions.
Conversely, Indonesia and Taiwan announced over the weekend they would not impose retaliatory tariffs following the US levy of a 32% duty on imports from both nations. This indicates a varied international response to the US tariffs, with some countries opting against escalation.
Vietnam’s leader, To Lam, has requested President Trump to postpone a 46% duty on Vietnamese exports to the US by “at least 45 days,” according to an AFP news agency and New York Times report. This request suggests diplomatic efforts to mitigate the impact of the tariffs on specific trade relationships.
However, China declared on Friday its plan to impose a 34% tariff on all US imports, commencing on Thursday, April 10th. This retaliatory measure from China marks a significant escalation in the trade tensions and signals the potential for a full-fledged trade war.
Global Leaders Express Concerns
UK Prime Minister Sir Keir Starmer cautioned on Saturday that “the world as we knew it has gone,” indicating a profound shift in global economic order due to the tariff dispute. This statement reflects a wider international apprehension about the long-term implications of the trade policies.
Starmer stated the UK government would continue to advocate for an economic agreement with the US that would mitigate some of the tariffs. This underscores ongoing efforts by various nations to negotiate exemptions or alternative arrangements with the US.
A Downing Street spokesperson added that Starmer and Canadian Prime Minister Mark Carney concurred in a phone conversation that “an all-out trade war is in no-one’s interest.” This shared sentiment among key allies highlights the broad international consensus against escalating trade conflicts.
Israeli Prime Minister Benjamin Netanyahu is scheduled to meet with President Trump in Washington D.C. on Monday for trade discussions.
Netanyahu, addressing reporters before departing for the US, noted he is “the first international leader that is meeting with Trump” since the new tariffs were introduced. He emphasized this meeting demonstrates their “personal connection and the connection between our countries that is so essential in this time,” suggesting the importance of this bilateral relationship amidst global trade uncertainties.
Public Protests Against Tariffs and Trump Administration
Anti-Trump protests took place across numerous US cities over the weekend, representing the largest nationwide demonstrations of opposition since the President’s inauguration in January. These protests encompassed a range of grievances, including opposition to the newly implemented tariffs.
Hundreds of thousands of individuals participated in demonstrations in cities such as Boston, Chicago, Los Angeles, New York, and Washington D.C., among others. Protesters voiced concerns regarding President Trump’s agenda, spanning both social and economic issues, including the trade policies.
President Trump has urged the US to “hang tough” in the face of market turbulence. The upcoming reaction of Asian markets when they open on Monday remains to be seen, and will likely provide further indication of global market sentiment toward the unfolding trade situation.