In Washington, President Donald Trump remained steadfast in his approach to tariffs on China, undeterred by the market’s turbulent reaction. On Monday, he raised the possibility of additional tariffs against Beijing, signaling a potential intensification of a trade war that could negatively affect the global economy. This development followed China’s announcement of countermeasures in response to tariffs Trump unveiled last week.
“If China does not retract its 34% increase from their longstanding trading practices by April 8th, 2025, the U.S. will impose an additional 50% tariff on China starting April 9th,” wrote Trump on his social media platform, Truth Social. The U.S. President also stated that all ongoing negotiations with China would be halted.
Despite mounting market pressure, Trump has shown little inclination to temper his stance on tariffs, underpinning his belief that it will ultimately benefit the U.S. economy by boosting manufacturing jobs. When questioned on Monday about the possibility of suspending certain tariffs, Trump responded, “We’re not looking at that.” However, he expressed willingness to negotiate, provided any deal is fair to the United States, indicating that both negotiated agreements and permanent tariffs are possible.
Although Israeli Prime Minister Benjamin Netanyahu announced the removal of tariffs on U.S. goods, Trump did not commit to reciprocating by eliminating tariffs on Israeli imports. The White House declared that Trump would veto a Senate proposal requiring congressional approval for new tariffs, expecting Republican legislators to support him despite potential economic and political implications.
Nevertheless, concerns about economic uncertainty arise, even among Trump’s supporters. Senator John Kennedy, a Republican from Louisiana, concurs with Trump’s goal for improved trade deals but remains uneasy about the unpredictable economic landscape.
If Trump proceeds with the proposed taxes on Chinese imports, overall U.S. tariffs on Chinese goods will skyrocket to 104%. This increase would compound the existing 20% tariffs imposed as a penalty for fentanyl trafficking, alongside the previous week’s 34% tariffs. These measures could lead to higher consumer prices in the U.S. and incentivize China to form stronger alliances with other trading partners.
China’s Commerce Ministry in Beijing warned they would not succumb to U.S. pressures, stating, “The U.S. threat to escalate tariffs on China is a mistake on top of a mistake.” Meanwhile, the U.S. stock market reacted negatively, with the Dow Jones dropping by 0.9% and the S&P 500 slipping by 0.2%, although the Nasdaq saw a slight 0.1% increase.
Even though Trump’s first term boasted stock market gains, Wall Street vulnerabilities in his second term have not steered him away from his aggressive economic agenda. Referring to potential economic downturns, Trump stated, “I don’t mind going through it because I see a beautiful picture at the end.”
Despite various explanations by Trump officials for his economic policies, little success has been made to calm market concerns. The stock market briefly rallied in reaction to unfounded rumors that a tariff pause, excluding China, might be under consideration; however, the White House quickly shot down such speculation as “fake news.”
Trump has stood by his tariff strategy amid recession concerns, asserting the necessity of tariffs for revitalizing domestic industries and reforming trade relationships. Consequently, this has caused shifts in U.S. economic policy, with Trump urging the Federal Reserve to lower interest rates despite high inflation.
Federal Reserve Chair Jerome Powell cautioned that additional tariffs might escalate inflation, opting for cautious observation before making any adjustments. European Commission President Ursula von der Leyen signaled the EU’s intention to diversify trade relations beyond the U.S.
In other trade discussions, Trump mentioned talks with Japanese Prime Minister Shigeru Ishiba, criticizing Japan’s treatment of U.S. trade. Ishiba expressed deep concern over tariffs potentially deterring Japanese investment in the U.S., stressing the situation as a “national crisis” and pledging to negotiate.
White House trade adviser Peter Navarro suggested that significant efforts beyond lowering tariffs would be needed to finalize trade agreements, indicating potentially prolonged negotiations. During a White House meeting, Netanyahu stated his country’s removal of tariffs on U.S. products in reaction to American tariffs on Israeli goods.
While Trump acknowledged Israel’s decision, he did not confirm any tariff reduction due to the foreign aid provided to Israel. The U.S.’s trade deficit with Israel last year was $7.4 billion.
Trump’s current term efforts to maintain unity amid internal discord have highlighted some rifts among supporters. Hedge fund manager Bill Ackman criticized Commerce Secretary Howard Lutnick about indifference to economic distress, later apologizing but reiterating tariff-related concerns.
Elon Musk, an influential adviser to Trump on governmental changes, expressed skepticism about tariffs, fearing cost increases for Tesla. Musk advocated for zero tariffs between Europe and the U.S., envisioning a transatlantic free trade zone.
Navarro countered Musk’s stance, highlighting that as a businessperson, Musk was naturally prioritizing his interests. The unfolding tariff situation continues to pose significant challenges and uncertainties, warranting close observation as details evolve.