Despite growing criticism from Wall Street, international allies, and economists, U.S. President Donald Trump has reaffirmed his commitment to his aggressive trade policies, insisting that the ongoing tariff war will ultimately benefit the American economy.
As markets fluctuate and fears of a global downturn escalate, Trump took to his Truth Social platform to champion his trade strategy. “We are doing really well on our TARIFF POLICY. Very exciting for America, and the World!!!” he posted, dismissing concerns raised by financial leaders and foreign governments.
In a surprising move following a major stock market slump, the President rolled back a portion of the tariffs imposed on foreign goods, giving countries 90 days to negotiate new trade agreements. However, he simultaneously escalated the conflict with China, raising tariffs on Chinese imports to 145 per cent, while maintaining 10-per-cent tariffs on most other nations and 25 per cent on automobiles, steel, and aluminum.
This dual approach has sparked alarm across financial markets. JPMorgan Chase CEO Jamie Dimon warned of “considerable turbulence” in the U.S. economy, pointing to inflation, persistent deficits, and falling corporate earnings. “Estimates for corporate profits are being slashed,” Dimon said, adding that market uncertainty is causing many companies to withdraw financial guidance.
The bond market reflected those fears as 10-year U.S. Treasury yields continued to rise—signaling the likelihood of higher borrowing costs for consumers and businesses alike.
Abroad, China reacted forcefully. President Xi Jinping raised retaliatory tariffs on American products to 125 per cent and called on the European Union to join a united front against what he described as “unilateral bullying.” Without directly naming Trump, Xi reinforced his commitment to China’s economic resilience despite external pressure.
Experts believe the economic strain on both countries could force eventual negotiations, but not without prolonged tension. Andrew Collier, a senior fellow at the Harvard Kennedy School, emphasized that both leaders’ pride and political posturing may delay meaningful dialogue. “Back-channel talks and symbolic concessions might emerge soon, but a real breakthrough is still a way off,” he said.
In Europe, Ursula von der Leyen, President of the European Commission, hinted at expanding the trade battle into new territory. She warned of retaliatory digital levies that would target major American tech companies like Google and Facebook. “We are developing measures—digital services and advertising revenues could be taxed,” she told the Financial Times.
Meanwhile, U.S. Trade Representative Jamieson Greer claimed a packed schedule of trade discussions—with everyone except China. While meetings with Israel and Taiwan are ongoing, he admitted there have been no talks initiated with Beijing.
Despite lacking a clear outline of what the administration seeks in new trade agreements, Trump continues to take a confrontational approach, even toward nations with existing free trade arrangements. Karoline Leavitt, the White House press secretary, doubled down on this position. “The President made it very clear: When the United States is punched, he will punch back harder,” she said.
New tariffs targeting pharmaceutical imports are also on the table, adding to concerns over rising costs and limited supply.
Meanwhile, American consumer confidence took a sharp hit, dropping 11 per cent this month, according to a University of Michigan report. It’s now at its second-lowest point in over seven decades—surpassed only by the inflation spike in mid-2022, which helped pave the way for Trump’s return to office.
Canada and Mexico remain exempt from the 10-per-cent tariff but are still subject to the 25-per-cent levies on metals and vehicles. Goods traded outside the USMCA framework now face higher costs—25 per cent for most and 10 per cent for select resources like oil and potash.
With tensions rising and no immediate resolution in sight, Trump appears prepared to weather the storm—betting that unwavering pressure and tough tactics will reshape global trade on America’s terms.
