President Trump's new tariffs triggered a market sell-off, foreign retaliation, and criticism from corporate America and the Federal Reserve. Despite this, Trump remained defiant, spending his day golfing in Florida while the markets plunged.
Trump's inconsistent messaging on the tariffs, wavering between negotiation and permanent policy, created uncertainty in the market. His administration's attempts to convey unity failed to address the threat of retaliatory tariffs from China, which imposed a 34% tariff on US goods.
The article highlights widespread criticism of the tariffs. A JPMorgan executive predicted inflation and recession, and Federal Reserve Chairman Jerome Powell expressed concern about the uncertain economic outlook and potential for higher inflation or unemployment. Corporate America expressed anger, with some CEOs considering legal action. The article also notes many of Trump's allies were confused and frustrated by the tariffs and their implementation.
Despite the negative reactions, Trump is actively negotiating trade deals with Vietnam, India, and Israel. He also pressured the Federal Reserve to lower interest rates. His son Eric suggested that the first country to negotiate would win. His administration attempted to deflect criticism, stating that Trump has warned of short-term pain and is not guided by the market, but the reactions from the market suggests otherwise.
The article reveals internal divisions within the Trump administration over the tariffs' approach and impact. Treasury Secretary Scott Bessent, among others, advocated for a more nuanced approach, but Trump’s views, influenced by Peter Navarro, remained resolute. The article ends by indicating that attention might shift to Trump's tax plans, which are seen as potentially more politically advantageous than the controversial tariffs.