President Donald Trump does not intend to back down from his plan for sweeping import tariffs that have already caused a sell-off in global equity markets and some commodities, administration officials say.
The tariffs — which will start at 10pc for most imports on 5 April before steeper country-specific tariffs take effect on 9 April, with exceptions for some energy and mineral imports — have caused key stock indexes to drop by as much as 5pc, with even larger declines in crude futures, as investors brace for lower growth and a higher chance of a recession. Trump earlier today defended the tariffs, as he prepared to leave the White House for a dinner tonight at a golf tournament at one of his resorts in Florida.
"THE OPERATION IS OVER! THE PATIENT LIVED, AND IS HEALING," Trump wrote in a social media post before major stock markets opened.
Trump's cabinet has downplayed the short-term price effect of the tariffs, which they say will boost economic growth in the US and cause a resurgence in domestic manufacturing. US commerce secretary Howard Lutnick said he does not think there is "any chance" that Trump will rescind the tariffs, and said Trump will only begin to work on new trade deals once a country has "really, really changed their ways" on trade practices.
"Trump is going to stand firm because he is reordering global trade," Lutnick said today in an interview with CNN. "Make no mistake about it, America has been exploited, and he is done allowing America to be exploited."
Other administration officials have suggested a greater potential for lower tariffs in the near-term. US treasury secretary Scott Bessent has encouraged world leaders to "take a deep breath" and not to "panic" because the tariff rates that Trump announced were a "ceiling" that might come down, so long as there was no retaliation.
"Don't immediately retaliate, let's see where this goes, because if you retaliate, that's how we get escalation," Bessent said on 2 April during interview on Fox News.
The tariffs have caused bipartisan backlash on Capitol Hill, but so far legislative action has been symbolic and unlikely to become law. The US Senate, in a bipartisan vote on 2 April, approved a joint resolution that would end the justification Trump has used to put tariffs on Canada. US senators Chuck Grassley (R-Iowa) and Maria Cantwell (D-Washington) introduced a bill today to eliminate most new presidential tariffs after 60 days without approval by the US Congress. Democrats say the tariffs will force consumers to pay far more on everyday goods, with revenue offsetting Republican plans to provide more than $5 trillion in tax cuts.
"Donald Trump is using tariffs in the dumbest way imaginable. In fact, Donald Trump slapped tariffs on penguins and not on Putin," US Senate minority leader Chuck Schumer (D-New York) said today, in reference to Trump's decision to put a 10pc tariff on an island populated only with penguins.
Trump has claimed his country-specific tariffs are "reciprocal" even though they have no relation to the tariffs each country charges on US imports. Instead, Trump's tariffs were calculated based on a universal equation that is set at half of the country's trade deficit with the US, divided by the country's imports from the US, with a minimum tariff rate of 10pc.
Major US trading partners are preparing for retaliatory tariffs. Canada's prime minister Mark Carney said he would respond to Trump's tariffs on automobiles, which took effect today, by "matching the US approach" and imposing a 25pc tariff on auto imports that do not comply with the US-Mexico-Canada free trade agreement. China said it was preparing unspecified countermeasures to US tariffs that would be set at 54pc.
Trump's cabinet today dismissed the market reaction to the tariffs. Stock markets are going through a "short-term adjustment" but the tariffs will ultimately result in more growth and additional investments, US Small Business Administration administrator Kelly Loeffler said today in an interview on Fox News
"The gravy train is over for the globalist elites," said Loeffler, who previously was a top executive at US exchange operator ICE.
