(Bloomberg) — President Donald Trump and his economic team dismissed investors’ fears of inflation and recession, offering no apologies for the market turmoil sparked by sweeping global tariffs and defiantly insisting a boom is on the horizon.
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Trump, speaking Sunday on Air Force One, struck a determined tone and repeatedly defended the tariff barrage unveiled last week. He also drew something of a line in the sand, saying he wouldn’t strike deals to cut the highest tariffs unless they eliminate the US trade deficit with that country.
“We’re going to become a wealthy nation again — wealthy like never before,” Trump told reporters Sunday. “We have all the advantages. Forget markets for a second — we have all the advantages.”
“I don’t want anything to go down, but sometimes you have to take medicine to fix something,” Trump said as US equity futures slumped and the yen surged in a sign of deepening turmoil from the tariffs.
Asian shares tumbled as much as 7.9%, the worst intraday drop in more than 16 years. Stocks in Hong Kong and China fell sharply, with the Hang Seng plunging more than 10%. Australia’s trade-reliant benchmark index fell the most since the start of the Covid pandemic, while drops triggered circuit breakers for futures in Tokyo. Taiwan’s stock index, open for its first day since Trump announced his worldwide tariffs last week, dropped the most on record.
Trump’s remarks underscored those of his top economic officials, who fanned out across the airwaves Sunday to argue the virtues of Trump’s plan, leaving no hint of second thought within the administration.
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On the heels of huge global stock market falls, Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and others dug in and declared that Trump would persist in his tariffs agenda, whatever markets may do.
“The tariffs are coming,” Lutnick said on CBS’s Face the Nation, adding that Trump “announced it and he wasn’t kidding.”
“I see no reason that we have to price in a recession,” Bessent told NBC’s Meet the Press with Kristen Welker, despite economists at JPMorgan saying Friday they now expect the US to slip into a recession this year.
Markets were set for another tough week, with US equity futures plunging Sunday. Contracts on the S&P 500 Index dropped 4.4% at 8 p.m. in New York, following a 10% drop in the underlying index in two days.
As Trump posted videos of himself golfing in Florida, White House trade czar Peter Navarro said investors should believe Trump’s determination, even if levels change through negotiation. Bessent said more than 50 countries had called the administration, but any talks are going to take time.
“They’ve been bad actors for a long time. And it’s not the kind of thing you can negotiate away in days or weeks,” Bessent said. The US will first have to determine if other countries’ offers were “believable”.
“We are going to have to see the path forward. Because, you know, after 20, 30, 40, 50 years of bad behavior, you can’t just wipe the slate clean.”
Trump singled out China and the European Union in his comments, and said world leaders are calling him trying to make a deal. But Trump — who used a crude formula to calculate the tariffs in a way that applied higher ones to countries that export more to the US than they import — said he won’t sign deals unless they eliminate the US trade deficit with the country in talks. That will be nearly impossible with several of the low-wage hubs that got some of the higher tariffs, but are a source of affordable US imports.
“To me a deficit is a loss. We’re gonna have surpluses or we’re going at worst going to be breaking even,” Trump said, adding: “And you know, I was elected on this. This was one of the biggest reasons I got elected.”
In the two days following Trump’s April 2 tariff announcement, markets shed $5.4 trillion in value and dragged the S&P 500 to the lowest level in 11 months.
Bessent, a former hedge fund manager who built his fortune through his own Key Square Group and at Soros Fund Management, played down the carnage in markets that he described as “organic animals.”
“The market consistently underestimates Donald Trump,” he said.
Navarro predicted that the current swoon in equities would eventually turn into a roaring market. “We will find a bottom in this market quickly,” he told Fox News’ Sunday Morning Futures. “We will hit 50,000 on the Dow easily by the end of this term.”
‘Not what we voted for’
Outside the Trump administration, others were less sanguine.
“I strongly believe launching tariffs on April 9th against the entire world — massively in excess of what we are being charged — is a mistake,” Pershing Square founder Bill Ackman, who had endorsed Trump in the 2024 election, said in an X post.
“The president is losing the confidence of business leaders around the globe. The consequences for our country and the millions of our citizens who have supported the president — in particular low-income consumers who are already under a huge amount of economic stress — are going to be severely negative,” Ackman wrote in another post. “This is not what we voted for.”
Former Treasury Secretary Larry Summers said last week’s selloff was the fourth-largest two-day move since World War II, after the 1987 market crash, the 2008 financial crisis and the 2020 Covid pandemic.
“A drop of this magnitude signals that there’s likely to be trouble ahead, and people ought to just be very cautious,” Summers, a Harvard University professor and paid contributor to Bloomberg TV, said in a post on X.
The Trump team’s comments came the day after an additional 10% duty on all US imports went into effect Saturday. Additional tailored tariffs of up to 50% are due to go into effect on imports from roughly 60 countries on Wednesday. The announced tariffs will take US import taxes to their highest level in more than a century.
Consumer Prices
Kevin Hassett, head of the White House’s National Economic Council, acknowledged that US consumer prices “might go up some,” but suggested that concern among economists, the Federal Reserve and some lawmakers was overblown.
Speaking on ABC’s This Week, Hassett also said Americans will eventually benefit from tax and spending cuts that Trump wants to push through Congress.
Both Bessent and Hassett downplayed concerns that the tariff barrage will stoke inflation, setting up an continued disagreement with the Federal Reserve and Wall Street economists.
Fed Chairman Jerome Powell said Friday it’s “becoming clear the tariff increases will be significantly larger than expected,” likely leading to higher inflation and slower growth.
The unified comments from Trump’s top economic advisers on Sunday reinforced the growing view that the president intends to make his tariffs a permanent fixture and sees any resulting economic pain as worth it for a longer-term transformation of the US economy.
Agenda at Risk
Trump has said he is moving to reshape the global economy to America’s advantage, arguing that the tariffs will prompt a wave of investment as companies build new factories in the US, bringing jobs and wealth home to the US.
The main target of his ire is a US trade deficit in goods that topped $1 trillion last year. Removing that, Trump and his team say, is a national security priority and will “make America wealthy again.”
Marc Short, who served in Trump’s first term as legislative affairs director and then as chief of staff to Vice President Mike Pence, said markets assumed Trump meant the tariffs as a bargaining chip like in the first administration, but Trump has been hearing different advice this time around.
Short, who like Pence doesn’t support the tariffs, said in an interview Saturday that he expected an eventual “capitulation” by the administration to markets. “But I don’t think it’ll be soon,” he said. “And when it comes, it’ll be framed as a victory.”
Short also said a potential recession would risk other elements of Trump’s agenda, including talks in Congress on extending tax cuts from his first term, if Republicans face constituents’ pressure about rising costs.
–With assistance from Hadriana Lowenkron, Jennifer A. Dlouhy, Tony Czuczka and Anand Krishnamoorthy.
(Updates with Asia markets plunge starting in 4th paragraph, Ackman criticism in 23rd paragraph.)
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