The Trump admin’s tariff hikes are prompting major responses
Image: Carlos Barria/Reuters
President Trump’s recent decision to enact across-the-board 10% tariffs—which took effect on Saturday—plus higher rates for other trade partners has elicited a series of reactions with major implications for the US economy.
Catch up quick
China responds in kind. On Friday, Beijing enacted a 34% reciprocal tariff on all US imports starting April 10, matching the Trump admin’s new duty imposed last week. China also effectively restricted US access to several key imports, including rare earth minerals critical for technologies like nuclear reactors, EVs, MRI scans, and more.
Many countries are open to a deal. 50+ nations have reached out to the Trump admin to start negotiations on tariffs, administration officials said on Sunday. Vietnam’s top leader, To Lam, reportedly sent a letter to Trump this weekend asking for a 45-day tariff delay to provide time for dealmaking.
Fed projections have soured, but the bank isn’t rushing to move. Fed Chair Jerome Powell on Friday predicted the US economy will face higher inflation and weaker growth in the near future compared to expectations a few weeks ago, citing Trump’s larger-than-anticipated tariff hikes. Powell also said the Fed doesn’t “need to be in a hurry” to cut interest rates over the coming months.
The stock market continued to tank. Following a steep decline on Thursday, US stocks had a near-repeat performance on Friday. All three major indexes fell at least 5.5% and the Nasdaq officially entered a bear market, down 22+% from its December high. The combined ~$6.6 trillion in lost US market value on Thursday and Friday represents the biggest two-day pullback on record.
A legal challenge to tariffs has arisen. On Thursday, a nonprofit legal group filed a federal lawsuit claiming Trump illegally used a national emergency law to justify 20% tariffs on China earlier this year. Analysts say the case could also set a precedent regarding the legality of Trump’s major tariff moves last week.
Looking ahead…The Trump admin’s elevated reciprocal tariffs on ~90 nations it considers “bad actors” on trade will take effect on Wednesday (here’s how those rates were calculated).
📊 Flash poll (long-form): In general, what are your thoughts on the current Trump administration tariff approach? The most thoughtful answers will be featured in tomorrow’s newsletter.
See a 360° view of what pundits are saying →
Sprinkles from the Left
- Some commentators argue that congressional Republicans should bear some responsibility for allowing Trump to overreach with Executive power, since Congress holds the power to end his phony “emergency” justification but is refusing to intervene.
- Others contend that belief in Trump, which has so far proven unshakeable, is facing its strongest stress test yet, as the president is protected by an echo chamber that repeats his talking points about pain now and prosperity later and ignores wider public sentiment.
- “Congress can end Trump’s phony trade emergency” –Washington Post Editorial Board
- “Will Republicans Really Let the Global Economy Crash?” –Nia-Malika Henderson, Bloomberg
- “The Childish Tariff Formula That Will Reshape the Global Economy” –Binyamin Appelbaum, NY Times
Sprinkles from the Right
- Some commentators argue that many Americans are confused as to why Trump would essentially bet his presidency and GOP control of Congress on the tariff gambit, when his administration was already scoring major successes by sealing the border, deporting alien criminals, and exposing gov’t fraud and waste.
- Others contend that Trump’s tariffs represent a high-stakes effort to build up leverage and resources to manage America’s debt, reset its industrial base, and renegotiate its standing in the global order.
- “Trump bets the White House — and GOP control of Congress — on tariffs” –Michael Goodwin, NY Post
- “Here's what Trump is really up to with high-stakes tariff gambit” –Tanvi Ratna, Fox News
- “Terminate the Trump tariffs before it's too late” –Sen. Rand Paul (R-KY)
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