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Trump Is Defiant as Tariff Moves Roil Markets a Second Day

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Two days after President Trump announced his expansive global tariffs, the United States confronted wide-ranging and painful blowback, as China retaliated against American goods and markets plummeted again on worries of a persistent, damaging trade war.No portion of the global economy appeared unscathed as the world braced for Mr. Trump to begin imposing his nearly across-the-board taxes on imports Saturday, marking the first salvo in a potentially costly trade conflict that the president has vigorously defended.China, which Mr. Trump has already hit with 20 percent tariffs, announced plans to retaliate. Beijing promised to impose a 34 percent tariff on American goods next week, including on agricultural products. China calibrated its tariffs to match Mr. Trump’s decision to add a 34 percent tax to Chinese imports.The tit-for-tat delivered a huge blow to financial markets, as Wall Street reckoned with the rising odds of an escalating global trade standoff. By the closing bell, the S&P 500 had fallen by almost 6 percent, pulling it closer into a bear market, a widely used Wall Street term for a decline of at least 20 percent from its peak. The tech-heavy Nasdaq fell 5.8 percent, pushing it into bear market territory.As China took aim at the United States, Ngozi Okonjo-Iweala, the director general of the World Trade Organization, warned on Friday against a “cycle of retaliatory measures that lead to further declines in trade.” In the United States, Jerome H. Powell, the chair of the Federal Reserve, struck his own downbeat note over the unpredictable trajectory of the economy.“While uncertainty remains elevated, it is now becoming clear that the tariff increases will be significantly larger than expected,” Mr. Powell said. “The same is likely to be true of the economic effects, which will include higher inflation and slower growth.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Ted Cruz and Other Senate Republicans Question Trump’s Tariffs

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    Some Republican senators on Capitol Hill, including one of President Trump’s most ardent supporters, have signaled their uneasiness to the sweeping global tariffs that the president announced this week and that sent global markets reeling.Senator Ted Cruz, Republican of Texas, warned on Friday that a future where other countries slap retaliatory tariffs on U.S. goods, as China has already done, was a “very real possibility” and would be a “terrible outcome” for the country.“It’s terrible for America,” Mr. Cruz said on the latest episode of his podcast. “It would destroy jobs here at home and do real damage to the U.S. economy if we had tariffs everywhere.”Mr. Cruz also said that a trade war would likely push inflation up and burden consumers with higher costs.“I love President Trump. I’m his strongest supporter in the Senate,” Mr. Cruz said. “But here’s one thing to understand: A tariff is a tax, and it is a tax principally on American consumers.”Mr. Cruz’s comments came just two days after the Senate, in a largely symbolic move, voted to halt planned 25 percent levies on Canada. However, the bill is almost certain to die in the House — and even if it does not, Mr. Trump would be unlikely to sign it.Mr. Cruz was not among the Republican senators who joined all Democrats in pushing the bill through. They were Senator Lisa Murkowski of Alaska, Senator Susan Collins of Maine, and Senators Rand Paul and Mitch McConnell, both of Kentucky.On Thursday, another top Republican senator — Chuck Grassley of Iowa — teamed up with a Democrat to introduce a bill aiming to reclaim congressional authority over the implementation of tariffs.The bill, which Mr. Grassley co-sponsored with Senator Maria Cantwell, Democrat of Washington, would require the president to give Congress 48 hours notice of any new tariffs. Congress would then have to approve those tariffs within 60 days, or they would expire. Mr. Cruz was not a co-sponsor. More

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    Powell Warns Trump’s Tariffs Risk Stoking Even Higher Inflation and Slower Growth

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    Jerome H. Powell, the chair of the Federal Reserve, warned that President Trump’s tariffs risk stoking even higher inflation and slower growth than initially expected, as he struck a more downbeat tone about the outlook, despite the economy so far remaining in a “good place.”“While uncertainty remains elevated, it is now becoming clear that the tariff increases will be significantly larger than expected,” he said. “The same is likely to be true of the economic effects, which will include higher inflation and slower growth.”Mr. Powell characterized the risks of that outcome, which he warned could include higher unemployment, as “elevated.”“While tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persistent,” he said in a speech at a conference in Arlington, Va., on Friday.“Avoiding that outcome would depend on keeping longer-term inflation expectations well anchored, on the size of the effects, and on how long it takes for them to pass through fully to prices,” he said. Higher inflation stemming from tariffs could show up “in the coming quarters,” he said.Mr. Powell added that the Fed’s “obligation” was to ensure that a “one-time increase in the price level does not become an ongoing inflation problem.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump Officials Warn of Tariff Pain as Price Increases Loom and Stocks Tumble

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    In the weeks leading up to his expansive global tariffs, President Trump and his top aides tried to prime the public for economic pain. They warned that while there would be fallout from their aggressive trade strategy, it would prove short-lived and benefit the economy in the long run.Investors, businesses and others made clear on Thursday that the U.S. economy was not ready to accept that approach. Global markets tumbled, economists warned of a possible recession and consumers braced for price increases on cars, food, clothing and more.The early tumult underscored the high stakes of Mr. Trump’s agenda, which the president has framed as a painful medical procedure to rescue an economy he likened to a “sick patient.” In the eyes of Mr. Trump, the United States is going to “boom” once his tariffs have had time to reset the nation’s trade relationships, raise revenue and boost domestic production.But those tariffs are expected to send prices skyrocketing in the interim, an unwelcome development for Americans already struggling with years of elevated prices. Several economists have increased the odds of a recession in their forecasts as they projected a slowdown in consumer spending, business investment and economic growth.A new analysis from the Yale Budget Lab found that Mr. Trump’s overall tariffs could cause price levels to rise 2.3 percent in the short term. That would translate into an average loss of $3,800 in purchasing power per household based on 2024 dollars.“Prices are going to go up, period,” said Martha Gimbel, executive director of the Yale Budget Lab, adding that companies were going to feel the immediate pinch. “These are really big tariffs. These are not things we can expect companies to just absorb.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • 150 Shares23 Views

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    Canada’s Carney Puts Tariffs on U.S.-Made Cars as Stellantis Plant Pauses Production

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    Prime Minister Mark Carney said that Canada had introduced a 25 percent tariff on cars and trucks made in the United States in retaliation for the tariffs that went into effect Thursday morning on Canadian vehicles.Five hours before the tariffs imposed by President Trump took effect, the automaker Stellantis told the union representing workers at its minivan and muscle car factory in Windsor, Ontario, that the plant would close Monday for two weeks so it could assess the effects of the tariffs, idling about 3,600 employees.Mr. Carney estimated that Canada would collect about $5.7 billion from the retaliatory tariffs he said it was imposing — on top of the $42 billion or so he said Canada would generate from the tariffs it imposed on March 4. That money, Mr. Carney said, would go toward helping workers and businesses affected by the U.S. tariffs.“We take these measures reluctantly,” Mr. Carney said at a news conference after a meeting with Canada’s premiers. “And we take them in ways that’s intended and will cause maximum impact in the United States and minimum impact here in Canada.”He added, “We can do better than the United States. Exactly where that comes out depends on how much damage they do to their economy.”Canada’s tariffs, Mr. Carney said, would exclude auto parts, and the country would still allow companies that make cars in Canada — Stellantis, Ford, General Motors, Honda and Toyota — to import vehicles built in the United States without paying tariffs.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump Imposes Tariffs on Remote Islands

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    President Trump’s tariffs have spared almost no corner of the Earth. Even tiny, sparsely populated islands that export close to nothing.Among the countries and territories listed on sheets of paper that were distributed to reporters in the White House Rose Garden on Wednesday were Heard Island and McDonald Islands, Australian territories near Antarctica where many penguins but no people live. Also listed were the British Indian Ocean Territory, a collection of islands that are mostly uninhabited aside from U.S. and British soldiers stationed at the joint military bases on Diego Garcia.Some territories face even higher tariffs than their governing nations. Norfolk Island, an Australian territory in the South Pacific Ocean, faces 29 percent tariffs, compared with the 10 percent rate Mr. Trump imposed on the country.“I’m not quite sure that Norfolk Island, with respect to it, is a trade competitor with the giant economy of the United States,” said Prime Minister Anthony Albanese of Australia. “But that just shows and exemplifies the fact that nowhere on earth is safe from this.”In 2023, Norfolk Island exported $655,000 worth of products to the United States, including leather shoes and vehicle parts, and imported $116,000 worth of products from the United States, including chemical fertilizers, according to the Observatory of Economic Complexity, a data visualization platform.Other islands subjected to a 10 percent tariff rate included Tokelau, a territory of New Zealand that has fewer than 2,000 inhabitants. The Norwegian islands of Svalbard, which has about 3,000 residents, and Jan Mayen, where the only humans are the military personnel who operate a weather and coastal services station, were also targeted.The White House did not respond to a request for comment about why certain islands with few or no inhabitants were targeted.Réunion, a French territory east of Madagascar that has a population of less than 1 million, faces particularly steep tariffs, at 37 percent, compared to the 20 tariffs imposed on France. The Falkland Islands, a self-governing British Overseas Territory, will have to pay 41 percent or 42 percent tariffs (the White House gave two different figures), compared to 10 percent rates that Britain faces. More

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    Why Did Trump Impose Tariffs, and What’s Next? Everything to Know.

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    President Trump announced what could be one of the most drastic economic policy changes in decades on Wednesday, when he substituted America’s longstanding system of taxing imports with a new tariff system of his own devising.The president said the tariffs would reverse decades of what he called unfair treatment by the rest of the world and result in factories and jobs moving back to the United States.“The markets are going to boom” and “the country is going to boom,” Mr. Trump said on Thursday, as global financial markets suffered their biggest rout in years. He added that other countries “have taken advantage of us for many, many years.”Economists’ estimates have been far more grim, with most predicting that the president’s sweeping tariffs and likely retaliation will slow U.S. economic growth, push up costs for consumers and make life difficult for businesses that depend on international supply chains.The president’s measure is both consequential and complicated. Here’s what you need to know.What did the president just do?Mr. Trump announced two big tariff plans that apply to most of the world. One component is a “base line” tariff of 10 percent that will apply broadly to nearly all U.S. imports, except for products coming from Canada and Mexico.The second measure is what the president is calling a “reciprocal” tariff. That levy will apply to 57 countries that Mr. Trump says have high tariffs and other unfair economic practices that have hurt American exporters. He said this is a reciprocal tariff because it will match the way other countries treat the United States.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • 163 Shares24 Views

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    After Trump Tariffs, Volkswagen to Add ‘Import Fees’ to Cars Sold in U.S.

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    Volkswagen, the German automaker, has told its car dealers that it plans to add an import fee later this month to the price of imported cars sold in the United States.The company’s move is one of the first and clearest examples of automakers using price increases to deal with the 25 percent tariffs President Trump imposed on car and auto parts imports. The tariffs on vehicles went into effect on Thursday and the levies on parts will become effective on May 3.In an April 1 memo to dealers, Volkswagen said that the exact fees would be determined by the middle of April. The New York Times reviewed a copy of the memo. The automaker also told dealers it planned to cut back on sales incentives and had halted rail shipments of cars to the United States from its plants in Mexico, although shipments by sea continue.Volkswagen plans to hold cars that are subject to the tariffs in port for “the near term.” It also told dealers that the price of the Volkswagen Atlas sport utility vehicle, which is made in Chattanooga, Tenn., could be affected by the tariffs because it includes important imported components. The extent of the impact most likely will not be known until May, the memo said.The automaker, including its Audi and Porsche brands, imports almost all the cars it sells in the United States. Besides the Atlas, Volkswagen also assembles the ID.4 electric sport-utility vehicle in Tennessee.In a statement, Volkswagen confirmed it had sent the memo to dealers because it wanted to be “very transparent about navigating through this time of uncertainty.”“We have our dealers’ and customers’ best interest at heart, and once we have quantified the impact on the business we will share our strategy with our dealers,” the company said.Other automakers are also making adjustments to respond to the tariffs. Stellantis, which owns Jeep, Ram, Dodge and Chrysler, said on Thursday that it is temporarily halting production at a plant in Mexico and another in Canada in response to the auto tariffs.The company said that a factory in Windsor, Ontario, that makes the Chrysler Pacifica minivan and the Dodge Charger muscle car will shut down for two weeks. And a plant in Toluca, Mexico, that makes the Jeep Compass and Wagoneer S will be idled starting on April 7 for the rest of the month.Stellantis said that the production stoppages in Canada and Mexico would force it to lay off about 900 workers in Indiana and Michigan. More

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    The Job Market Has Been Resilient. The Trade War Could Be Its Undoing.

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    For three years, the U.S. economy has been buffeted by rapid inflation, high interest rates and political instability at home and abroad. Yet it has proved surprisingly resilient, supported by the sturdy pillars of robust consumer spending, a rising stock market, and healthy balance sheets for households and businesses alike.But one by one, those pillars have begun to crack under the weight of tariffs and uncertainty. The all-out global trade war that President Trump declared on Wednesday could be enough to shatter what had arguably been the economy’s final source of support, the strong job market.“The strength of the consumer is coming down to the jobs market,” said Sarah House, an economist at Wells Fargo. “And it’s increasingly perilous.”The sweeping tariffs that Mr. Trump announced on Wednesday, and the duties that U.S. trading partners quickly imposed in retaliation, sent stock indexes around the world tumbling on Thursday. The effects won’t be limited to the financial markets: Economists say tariffs will raise prices for consumers and businesses, which will lead employers to pull back on hiring and, if the tariffs remain in place long enough, lay off workers.“If the economy isn’t growing as fast, or it isn’t growing at all, you don’t need as many workers,” Ms. House said.Economists will get their latest glimpse of the job situation on Friday, when the Bureau of Labor Statistics will release March figures on hiring and unemployment.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More