Trump tariff policy: Trump hints at flexibility on China tariffs while the U.S. proceeds with sweeping trade levies. Despite a slight softening in his stance, Trump confirmed that April 2 will mark what he’s calling “Liberation Day in America,” introducing major duties on trade partners.
The Response of Markets to Trump’s Tariff Position
Following Trump’s comments, stock markets saw erratic fluctuations. He alluded to talks with Chinese President Xi Jinping, but the tone is still firmly set. The S&P 500 entered its sixth consecutive week of losses as a result of investors’ increased caution.
The OECD has also adjusted its U.S. economic growth projections downward, cutting forecasts from 2.4% to 2.2% for 2025 and from 2.1% to 1.6% for 2026. Global GDP is similarly expected to slow, dropping from 3.3% to 3.1% in 2025.
EU and China Reactions
The European Union is steadfast in its position even though it has chosen to postpone its retaliation taxes on American imports. The EU is ready for up to €26 billion in countermeasures. In the meantime, despite Trump’s constant pressure, Chinese officials are still amenable to talks.
Risks of Inflation and Recession
In addition to consumer confidence declining, Federal Reserve Chair Jerome Powell recently issued a warning that tariffs may cause short-term spikes in inflation. Economists are raising the prospect of stagflation, in which high inflation and rising unemployment occur at the same time, in response to persistent worries about growing costs and economic stagnation.
What’s Next?
The world is watching closely as Trump tariff policy takes effect on April 2. While the president remains committed to reshaping global trade dynamics, the long-term economic impact remains uncertain.
Source: NBC News
