Former President Donald Trump reignited global trade tensions this week, taunting China after it retaliated against his sweeping new tariffs and downplaying the massive stock market plunge that followed. “China played it wrong, they panicked – the one thing they cannot afford to do!” Trump wrote on Truth Social in all-caps, claiming the tariffs are a chance for Americans to “get rich.”
Markets around the world responded with sharp declines. Wall Street took a heavy hit, with the Dow Jones falling 5.5% and the S&P 500 nearly 6%. Global losses are estimated to have exceeded $6 trillion since Trump announced his so-called “Liberation Day” tariffs targeting dozens of countries.
US Federal Reserve Chairman Jerome Powell warned the tariffs would likely lead to “higher inflation and lower growth.” Despite this, Trump insisted “my policies will never change,” claiming big businesses are unconcerned and supporting his goal to push foreign manufacturers to relocate to the United States.
China hit back with 34% tariffs on US goods starting April 10 and vowed to take the issue to the World Trade Organization. Beijing also announced it would restrict the export of rare earth elements, vital to medical and electronic industries.
The European Union, hit with 20% tariffs, has signaled a phased and united response, possibly targeting US tech companies. France and Germany have warned of broader retaliation, with calls for patriotic investment and new data and tax strategies rather than direct tariff wars.
Meanwhile, Japan urged restraint, and Vietnam’s leadership discussed the issue directly with Trump. Canada imposed matching tariffs after the US levied a 25% tariff on all foreign-made cars. Automakers, including Stellantis and Nissan, have begun adjusting production, while Volvo pledged to ramp up its US operations.
Critics from both sides of the aisle voiced concern. Senator Amy Klobuchar slammed Trump for golfing while markets crashed, and Republican Senator Ted Cruz expressed worry about job losses. Trump, however, turned his attention to the Federal Reserve, publicly demanding a rate cut while flouting the tradition of central bank independence.
Amid the turmoil, Nintendo postponed preorders for its upcoming Switch 2 console, citing evolving trade conditions — a concrete sign that the tariffs are already affecting international business decisions.
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