Global markets were jittery on Monday as US President Donald Trump stood firm on his tough tariffs, despite growing Chinese retaliation and warnings of a global recession.
Countries around the world are struggling to mitigate the effects of new US tariffs, but Beijing has signaled it is countering the tariffs, escalating a trade war between the world’s two largest economies. Trump has doubled down on his demand to cut the deficit with America’s trading partners, saying he will not cut any deals until that is resolved.
“Sometimes you have to take medicine to fix things,” Trump said Sunday, telling reporters aboard Air Force One that world leaders were “eager to make a deal.” Trump last week announced a basic 10 percent import tariff on goods coming into the United States and higher rates for several countries, including the European Union (EU), Japan and Taiwan.
Most countries have stopped short of retaliating, but with Asian markets closed, China announced on Friday that it would impose a 34 percent retaliatory tariff on all US goods starting April 10. “(This is) a hard-force economic war,” said Stephen Innes of SPI Asset Management. “The market is telling you in simple terms: global demand is disappearing and a global recession is coming and is accelerating.”
Asian equities suffered further losses on Monday as trillions of dollars in stocks were wiped out globally and investors fled to safer assets. In Japan, the Nikkei fell 6.5 percent, having fallen nearly 8 percent in early trading. In Hong Kong, the Hang Seng fell nearly 10 percent and the Shanghai Composite fell more than 4 percent.
Taiwan’s main index, which closed Friday like Hong Kong and Shanghai, fell about 10 percent and Singapore’s by 8.5 percent. Futures contracts for the main boards of the New York Stock Exchange fell sharply on Sunday, suggesting more pain for Wall Street stocks when the market opens on Monday. US oil prices have fallen below $60 a barrel for the first time since April 2021, amid concerns about a global recession.
Agreements and alliances
Despite being one of Washington’s closest allies, Israeli Prime Minister Benjamin Netanyahu is set to meet with Trump on Monday, the first leader to do so since last week’s announcement that Israel has been slapped with a 17 percent tariff. British Prime Minister Keir Starmer warned in a newspaper op-ed that the status quo would increasingly rely on “deals and alliances” and that “the world as we know it is gone.”
Trump’s gradual deadlines have given some countries room to negotiate. However, he has said he will remain firm and his administration is warning against any retaliation. “More than 50 countries have contacted the president to start talks,” Kevin Hassett, head of the White House National Economic Council, told ABC’s This Week on Sunday, citing the US Trade Representative.
Manufacturing powerhouse Vietnam, which counted the US as its largest export market in the first quarter, has already reached out and requested a delay of at least 45 days to reduce the 46 percent tariff imposed by Trump.
Bad actors
Finance Minister Scott Besant also told NBC’s Meet the Press that 50 countries have contacted him. “I think it’s President Trump’s decision,” Besant said when asked if Trump would negotiate with them. “At this moment, he has created maximum influence for himself… I think we will have to see what countries offer and whether it is credible.”
He claimed, “There have been bad actors for a long time and this is not something that can be negotiated away in days or weeks.” Trump’s tariff guru Peter Navarro has hit back against growing concerns, promising investors “the biggest boom in the stock market we’ve ever seen” and insisting “you can’t lose money if you don’t sell.”
Russia is not targeted by the latest batch of tariffs, and Hassett cited negotiations with Moscow over Russia’s invasion of Ukraine as a reason for their exemption from the hit list. On Wednesday, a White House official suggested that Russia had reason to leave because trade was negligible due to sanctions.
Trump has long insisted that countries around the world that sell products to the United States are actually cheating Americans, and he sees tariffs as a way to right that wrong. “Someday people will understand that tariffs, for the United States, are a very beautiful thing!” Trump wrote on Truth Social on Sunday.
But many economists have warned that the tariffs are passed on to consumers and they could see higher home prices. “I don’t think you’ll see a big impact on consumers in the US,” Hassett said.
