President Trump threatened additional tariffs on China and markets bounced around amid the new US tariff policy that is set to fully roll out on Wednesday.
Trump posted that “if China does not withdraw its 34% increase above their already long term trading abuses by tomorrow, April 8th, 2025, the United States will impose ADDITIONAL Tariffs on China of 50%, effective April 9th. Additionally, all talks with China concerning their requested meetings with us will be terminated! Negotiations with other countries, which have also requested meetings, will begin taking place immediately.”
In terms of negotiations with other countries, it’s unclear how any deal would conflict with US assertions that Trump’s tariff policy is creating “a new Made in America revolution.”
“You can’t both revive the [domestic] manufacturing base and negotiate with a foreign country,” Jeanne Sheehan Zaino, an expert at the nonpartisan Center for the Study of the Presidency & Congress, told Bloomberg. “And so that is the conundrum that Donald Trump has himself in: What are the goals of this tariff policy?”
Trump and his top advisers retrenched over the weekend, with the president suggesting that equity markets may need to “take medicine” and posting that the new tariffs are “already in effect, and a beautiful thing to behold.”
Read more: What Trump’s tariffs mean for the economy and your wallet
Trump also reiterated that the impetus behind the tariff policy is trade deficits: “I spoke to a lot of leaders … from all over the world. … I said ‘we’re not going to have deficits with your country’ … to me a deficit is a loss. We’re going to have surpluses or, at worst, we’re going to be breaking even.”
On April 2, Trump announced a blanket 10% tariff on all goods coming into the US. He also added new duties on goods from 185 countries, which the president described as the “worst offenders” in terms of perceived unfairness on trade, slated to kick in on April 9.
American customs officials began collecting the new 10% tariff on imports from many countries on Saturday morning after the US stock market saw its worst week since 2020.
Various countries are still deciding how to respond (or not), and companies have begun adjusting to the new reality — largely by raising prices. Some countries responded with new tariffs of their own: Canada announced new duties on certain vehicles imported from the US, and China announced that it would impose countermeasures against the US starting April 10, including a 34% tariff on US goods.
The European Union is preparing an initial set of countermeasures. The tariff rate applied to the 27-nation bloc of EU countries under the policy is 20%, and about 70% of the EU’s exports to the US are covered. Trump adviser and Tesla CEO Elon Musk, appearing at an event on Saturday, said that “Europe and the United States should move, ideally, in my view, to a zero-tariff situation.”
“This is the single biggest trade action of our lifetime,” Kelly Ann Shaw, a trade lawyer and former White House trade adviser during Trump’s first term, told Reuters.
Here are the latest updates as the policy reverberates around the world.
LIVE453 updates
Document: EU commission proposes 25% counter-tariffs on some US imports
BRUSSELS (Reuters) – The European Commission proposed counter-tariffs of 25% on a range of U.S. goods on Monday in response to President Donald Trump’s tariffs on steel and aluminium, a document seen by Reuters showed.
The tariffs on some goods will come into effect May 16 and other later in the year, on December 1, the document said.
Read more here.
The ‘conundrum’ facing President Trump
Is the US open to negotiations with other countries on tariffs or not?
American officials have contradicted themselves on this point. On Sunday, trade adviser Peter Navarro asserted: “This is not a negotiation.” On Monday, President Trump stated: “Negotiations with other countries … will begin taking place immediately.”
In any case, observers are noting that the concept of negotiating lower tariffs would conflict with the stated plan to create “a new Made in America revolution.”
“You can’t both revive the [domestic] manufacturing base and negotiate with a foreign country,” Jeanne Sheehan Zaino, an expert at the nonpartisan Center for the Study of the Presidency & Congress, told Bloomberg. “And so that is the conundrum that Donald Trump has himself in: What are the goals of this tariff policy?”
BlackRock’s Larry Fink: Economy probably already in recession amid tariff turmoil
The leader of the world’s largest asset manager warned that the US economy has weakened under the Trump administration’s new tariff policy and has probably already fallen into a recession, Reuters reported.
Speaking at the Economic Club of New York, BlackRock CEO Larry Fink said there may be more inflationary pressure than the market realizes and that the stock market could decline 20% further.
However, the current market meltdown doesn’t post any systemic risks, he said. In fact, Fink argued the market declines represent “more of a buying opportunity than a selling opportunity” in the long run.
Read more here.
Trump threatens to impose additional 50% tariff on China
President Trump doubled down on tough trade talk with China Monday, stating that he is prepared to nearly double the duties on China if it does not remove retaliatory measures immediately.
Trump posted on social media: “… if China does not withdraw its 34% increase above their already long term trading abuses by tomorrow, April 8th, 2025, the United States will impose ADDITIONAL Tariffs on China of 50%, effective April 9th.”
Trump’s new threat, added to existing tariff plans, would put the US tariff rate at 104%
Trump also said that his administration would close the door to further trade talks with China, stating “their requested meetings with us will be terminated!” But negotiations with other countries will begin immediately, Trump added.
Stocks whipsaw after ‘pause’ headline triggers short-lived spike
US stocks swung wildly on Monday morning after speculation of a 90-day pause in reciprocal tariffs.
National Economic Council director Kevin Hassett’s remarks in an interview with Fox News that some countries had approached the US with some “great” deals appeared to be the catalyst.
The S&P 500 (^GSPC) and Dow Jones Industrial Average (^DJI) popped on the news after opening in the red. The tech-heavy Nasdaq Composite (^IXIC) spiked as much as 4%.
The White House quickly moved to shut down that headline, claiming that the pause rumors were “fake news.” That, in turn, sent stocks into negative territory once again.
The incident highlighted that investors were keen for a reprieve in the tariffs, which have fueled an intense stock market rout over the past three days. At last check, the major indexes remained choppy but were trading below the flat line.
Read more about today’s market action as tariff chaos grips Wall Street.
Frustrated world leaders wonder if Trump even wants a deal
Global markets are plunging amid the new US tariff policy, and world leaders are wondering what President Donald Trump would need in negotiations to relieve the pressure.
A few notable paragraphs from Bloomberg:
Read more here.
Trump: We’re engaging in ‘tough but fair’ trade talks with world’s nations
President Trump said the US is speaking with countries worldwide as global trade reordering sets in.
“Countries from all over the World are talking to us,” Trump posted on social media. “Tough but fair parameters are being set.”
The president also stated that Japan is sending a “top team” to negotiate a new trade agreement and called out trade with China as a major sticking point.
Markets in Asia retreated sharply on Monday as Japan’s benchmark Nikkei 225 (^N225) slid into a bear market, as did the Hang Seng (^HSI) in Hong Kong.
You can read more about the intensifying tariff-fueled market sell-off here.
Lawmakers may test Trump on tariffs this week as fears of a GOP election ‘decimation’ grow
Yahoo Finance Washington Correspondent Ben Werschkul reports:
Read more here.
EU set to drop bourbon from retaliatory tariffs list against US
According to reports in the Financial Times on Monday, the EU has decided to drop bourbon from its retaliatory tariff list against the US This move follows heavy lobbying from France, Italy, and Ireland, which aimed to protect their alcohol industries amid the escalating trade war.
EU Commission head talks tariff response with auto, steel, and pharma leaders
European Commission President Ursula von der Leyen spoke with metals industry representatives on Monday and planned a follow-up discussion with the automobile sector. The calls focused on strategizing responses to US tariffs.
Reuters reports:
Read more here
Trump again defends tariff policy
President Trump took to Truth Social on Monday morning to defend his tariff policy in the face of global markets selling off overnight.
Tariffs jolt Wall Street into ditching bold S&P 500 calls
Wall Street analysts are scrambling to dial back their optimism on US stocks, as Trump’s broad tariff plans send shockwaves through global markets and stir fears of a major economic shakeup.
Bloomberg News reports:
Read more here.
Ishiba to talk with Trump as Japan’s Nikkei enters bear market
Japan’s PM Shigeru Ishiba is set to speak with President Trump Monday, making a final push to soften a looming 24% tariff. The high-stakes call comes as Japan’s Nikkei 225 tumbles into bear market territory, rattled by fears of a deepening trade war.
Bloomberg News reports:
Read more here..
Japanese Prime Minister looks to visit US to reach tariff deal
Japan’s Prime Minister Shigeru Ishiba has announced plans to head to America in the near future to broach a tariff deal with President Donald Trump.
Bloomberg reports:
Read more here.
Trump says sometimes you have to ‘take medicine’ as markets crater again
Speaking to reporters aboard Air Force One on Sunday, President Trump said sometimes you have to “take medicine” when asked about the market’s recent sell-off, according to Reuters.
“I don’t want anything to go down, but sometimes you have to take medicine to fix something,” Trump said.
The president added that his policies were not intentionally trying to engineer a market sell-off.
Trump’s comments come as markets appeared set to begin the week where they left off Friday, with US stock futures down sharply across the board with Nasdaq 100 futures off more than 4% and futures tied to the Dow and S&P 500 both off more than 3.4%.
Last week, the Nasdaq closed in a bear market and the S&P 500’s losses reached 17% from the benchmark index’s record high hit back in February.
This weekend, Trump’s economic surrogates attempted to make clear in media appearances that the president’s shock tariff announcements last week were not a negotiation tactic.
Speaking Sunday evening, the president said no deal on tariffs with China would be forthcoming unless the US’ trade deficit with China was fixed. The US trade deficit with China reached $295 billion last year.
Trump added that he has spoken to leaders in Europe and Asia regarding his tariffs unveiled last week.
Trump calls tariff policy “a beautiful thing to behold.”
After US stock market futures plunged on Sunday evening, President Trump posted:
US stock futures tank as tariff rout restarts
US stock futures plunged Sunday evening, setting up Wall Street for another bruising day on Monday as markets braced for more fallout from President Trump’s fast-moving tariff policy.
Futures tied to the S&P 500 (ES=F) plummeted around 4%, while those on the tech-heavy Nasdaq (NQ=F) lost 4.3%. Dow Jones Industrial Average futures (YM=F) sank 3.7%.
Read more here.
Goldman warns on China stock market as tariffs kick in
Goldman Sachs’ chief China equity strategist Kinger Lau published a cautious take on China’s stock market in a new note.
“China equity’s resiliency thus far perhaps reflects: a) the possibility for the two sides to negotiate which might lead to subsequent tariff rollbacks; b) the potential for Chinese policymakers to intensify easing impetus; and, c) record-breaking pace of Southbound buying which has reached US$64 billion year to date,” Lau wrote.
“But with the US-China policy calendar still looking active in the coming weeks and the bilateral trade tensions escalating, we reiterate our view that the bull run will slow on event risks and profit-taking pressures, and now believe that the market may test our risk-case valuations in the short term until trade and policy clarity emerges, and/or a new tariff equilibrium is reached.”
First up to estimate tariff impact: beer maker Constellation Brands
It has been a busy weekend for the Street, with a lot of research teams working double time to estimate the impact of Trump’s new tariffs on companies and sectors (and then calm clients down, to the extent they can).
One note that caught my attention on Sunday is from EvercoreISI’s beverage analyst Robert Ottenstein ahead of Corona maker Constellation Brands (STZ) reporting earnings this coming Friday.
Here’s Ottenstein:
“Our first blush estimate, with no guidance from STZ yet, leads us to believe the most likely outcome is a $0.25-0.40 hit to STZ’s earnings. Assuming the company is USMCA compliant, the tariff impact results from the new 25% tariff on beer and empty aluminum cans, and just on the aluminum. We estimate STZ’s cost for an aluminum can ranges between $0.06-0.08/can, suggesting a $0.015-0.02 tariff impact/can. If that’s the case, we believe that STZ would probably absorb the impact of the tariff given current general beer demand weakness and that the tariff impact is relatively manageable in size.”
Constellation Brands will be in the unenviable position of being the first large company to put finer details on the tariff impact to investors.
Trump administration officials talk tariffs on Sunday shows
Trump administration officials are making the rounds on Sunday morning to back the president’s position and provide more information as markets prepare to reopen after a historically bad week.
Speaking to ABC News, U.S. National Economic Council Director Kevin Hassett claimed that “more than” 50 countries had already reached out to the White House to begin trade talks. Asked about a video claiming the president was purposely “crashing the stock market by 20%” that Trump’s Truth Social account shared on Friday, Hassett said: “He’s not trying to tank the market. He’s trying to deliver for American workers.”
Speaking to NBC News, Treasury Secretary Scott Bessent stated: “I see no reason that we have to price in a recession.”
Speaking to CBS, Commerce Secretary Howard Lutnick asserted that the tariffs “are definitely going to stay in place for days and weeks. That is sort of obvious. The president needs to reset global trade.”
