Trump to impose tariffs on Canada, Mexico,China tomorrow

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The Chinese government on Monday vowed to “fight to the end” after President Trump ramped up his tariff threat against the nation, warning he could impose an additional 50 percent tax on goods coming from the world’s second-largest economy.

China’s Ministry of Commerce characterized Trump’s tariffs as “completely groundless and is a typical unilateral bullying practice” and signaled that apart from the additional taxes Beijing issued last week, more could be rolled out in the near future.

Trump, in a post on Truth Social on Monday, escalated the back-and-forth between the two nations by threatening to add 50 percent to the current 54 percent tariff rate — reached after the administration imposed a 34 percent tax on China during last week’s announcement from the White House.

“If China does not withdraw its 34 percent increase above their already long-term trading abuses by tomorrow, April 8th, 2025, the United States will impose ADDITIONAL Tariffs on China of 50 percent, effective April 9th,” Trump wrote Monday on Truth Social. “Additionally, all talks with China concerning their requested meetings with us will be terminated!”

Last week, the president unveiled 10 percent flat-rate tariffs on all imports coming into the U.S. and a higher-priced reciprocal tariff on dozens of nations.

China responded days later, saying it would hit the U.S. with a matching 34 percent reciprocal tax on imports starting this week, arguing the sweeping import taxes undermine the “interests of the United States itself but also endangers global economic development and the stability of the production and supply chain.”

If imposed, import taxes on goods from China could reach as high as 70 percent.
Earlier in the year, the president slapped an additional 10 percent tariff on China, punishing the country for not doing enough to curb the flow of illegal drugs into the U.S., bringing the tax rate up to 20 percent.

“If U.S. insists on waging a tariff war, a trade war, China will fight till the end,” Chinese foreign ministry spokesperson Lin Jian said during the press conference Tuesday.

U.S. stock markets bounced back on Tuesday after several days of sustained sell-offs that saw equity markets crater since President Trump's announcement of global trading tariffs.

The recovery in Wall Street comes after shares in Europe and Asia rebounded earlier following a tumultuous day on global markets on Monday. The Dow Jones Industrial average was up over 1,200 points, or more than 3% in early trading on Tuesday after three sessions of steep falls. The S&P 500 and the Nasdaq were also up more than 3%.

But after the major slides and significant volatility in equity trading last week and into Monday — from Shanghai to New York, Frankfurt to Tokyo — any slight uptick in stock prices on Tuesday will only repair part of the value destruction that saw trillions of dollars in investor wealth wiped out over the past few days.

Despite the rebound, uncertainty remains
The major stock markets in Hong Kong and Shanghai — the Hang Seng Index and Shanghai Composite, respectively — closed slightly higher on Tuesday, while Tokyo's Nikkei ended the day's trading in Japan up more than 6%. It hit its lowest level in 18 months on Monday, with its listed stocks having lost almost a fifth of value over the past two weeks.

European markets were also posting gains on Tuesday, but investors in the continent's major stock markets have also suffered significant losses in the past week, and that's even before exporters have really begun to feel the effects of significant tariffs on European products sold to the United States.

With an eye toward the Trump administration’s outsized tariffs set to take effect at midnight, U.S. markets quickly reversed an early morning rally on Tuesday and closed down for a fourth-straight day.

The open question for investors, economists and the public remains whether — and how — the latest installment of Trump's tariff program will affect prices for consumer goods.

Asian and European markets rallied overnight, with U.S. stocks initially maintaining that momentum. But it ended up being a wild day for Wall Street, with the major indexes declining throughout the session. The S&P 500 swung about 7% — initially starting out strongly positive but finishing the day down 1.6%.

The tech-focused Nasdaq faced a similar swing, closing 2.2% lower. The Dow Jones Industrial Average fell 0.8%.

Those major indexes are now sharply lower since Trump's inauguration. The S&P 500 has lost 17% of its value, while the Nasdaq is down 22%.

Despite fresh rhetoric Tuesday from Trump and Treasury Secretary Scott Bessent about "deals," there is nothing to indicate that the dramatic growth slowdown that economic analysts are predicting with the implementation of the massive country-by-country duties — set to kick in Wednesday — will be staved off if Trump implements his vision as he currently foresees it.

“Aggressive and ubiquitous earnings growth downgrades will accompany negative corporate guidance,” analysts with BCA Research consultancy wrote in a note Monday. “Over time, as the damage the tariffs will inflict on the economy becomes a reality — a spell of economic downgrades will follow.”

On Tuesday morning, Trump posted to social media that China “wants to make a deal, badly.”

Those remarks came after Chinese officials called Trump’s latest threat to impose an additional 50% tariff “blackmail” and vowed China would “fight to the end.”

In an interview on CNBC early Tuesday, Treasury Secretary Scott Bessent said that China’s escalation was a “big mistake” and that it was “playing with a pair of twos.”

Though Bessent suggested “some good deals” could be hammered out with individual nations, even then “part of the calculus of that may be that some part of the tariffs stay on.”

Trump's vision would see America move production of much of what it currently imports back to its shores. Rather than merely charging more for importing goods into the U.S., Trump seeks to close or even outright reverse the U.S.’s large trade deficit with the rest of the world by re-shoring en masse goods production that has long been outsourced to the rest of the world.

The objective was further articulated Monday by Peter Navarro, Trump's senior adviser for trade and manufacturing. It came in the context of criticisms of him by Elon Musk, the Tesla boss who hit out at Navarro over the weekend.

“If you go to his Texas plant, a good part of the engines that he gets come from Japan and come from China,” Navarro said. “The electronics come from Taiwan... what we want — and the difference is in our thinking and Elon’s on this — is that we want the tires made in Akron. We want the transmissions made in Indianapolis. We want the engines made in Flint and Saginaw. And we want the cars manufactured here.”

Early Tuesday, Musk, who spent the first weeks of Trump’s second term playing an outsize advisory role, called Navarro a “moron” and “dumber than a sack of bricks.”

A growing chorus of economists and business leaders say that Trump's vision, while laudable, would come at the expense of massive price hikes for consumers, reduced wages for workers at the proposed plants, or lower corporate profits — all of which set off lower overall economic growth.

Trump's rollout has already caused trillions in paper losses for U.S. firms in anticipation of the reset. Late Monday, hedge fund billionaire Ken Griffin called Trump's tariffs proposal a "huge" mistake that would hurt the middle class.

“It’s going to cost you 20%, 30%, 40% more for your groceries, for your toaster, for a new vacuum cleaner, for a new car,” Griffin said at an event Monday, according to Bloomberg News. “Even if the dream of jobs coming back to America plays out, that’s a 20-year dream. It’s not 20 weeks. It’s not two years. It’s decades.”

In Senate testimony Tuesday, U.S. Trade Representative Jamieson Greer acknowledged the difficulties facing firms reliant on goods brought in from abroad.

“I think the challenges, frankly, are going to be more for companies that are largely dependent on imports from China and Asia, where they have to adjust their supply chains in a quick set of time,” Greer said.

Business sentiment continues to sour, with the National Federation of Independent Business reporting early Tuesday that its small business optimism index saw its biggest one-month decline since December 2020.

“The implementation of new policy priorities has heightened the level of uncertainty among small business owners over the past few months,” the federation's chief economist, Bill Dunkelberg, said in a statement. “Small business owners have scaled back expectations on sales growth as they better understand how these rearrangements might impact them.”

In a note to clients Tuesday, Goldman Sachs analysts warned not to read too much into stock rallies like Tuesday's.

"Bear market rallies are quite common," they wrote, citing past histories of wider market-drawdowns like the dot-com bubble and the 2008 financial crisis. "We see a pattern of rebounds before the market reaches a trough," they said.

U.S. corporate earnings season kicks off this week, with Delta Airlines reporting Wednesday and large U.S. banks reporting Friday. Sosnick said the impact of tariffs will be top of mind — but that there may not be firm answers given the ongoing uncertainty and even disbelief about what Trump has proposed.

"People are confused, scared and angry," Sosnick said.

There are literally modern "ghost cities" with no people...

Stocks returned to their downward trajectory today after a brief surge following President Donald Trump's announcement of a 90-day reduction on tariffs for more than 75 trading partners that had refrained from retaliating over his sweeping duties. A base tariff of 10% will remain on most U.S. trading partners, however.

The European Union said it was pausing its own countermeasures to try to work things out with the Trump administration, while China has doubled down on its own retaliatory duties and bellicose language.

China, which placed steep retaliatory tariffs on U.S. goods, will now come under an even larger hike in levies on its products, totaling 145%.

Trump acknowledges there will be 'transition problems' with economic policies
Trump acknowledged during a Cabinet meeting that his tariffs will pose "transition problems," but maintained that he thinks his policies will ultimately help the country.

"There'll be a transition cost and transition problems, but in the end, it's going to be a beautiful thing," Trump said. "We're doing again what we should have done many years ago."

More Britons are questioning 'special relationship' with U.S. amid concern over Trump's tariffs
The proportion of Britons who say their country no longer has a “special relationship” with the U.S. has doubled in the last year amid concern over Trump’s tariffs, a survey found.

Forty percent of respondents disagreed that there is a “special relationship” between the U.S. and the United Kingdom, up from 20% a year ago, according to the online survey by Ipsos UK, which was conducted from April 4 to 7.

U.S. influence is also viewed more negatively, with 41% of Britons saying the U.S. mostly uses its influence for bad in the world, a 25-point increase from a year ago.

“These findings underscore a growing unease among the British public regarding the global role and trade policies of the United States — traditionally one of our most steadfast allies,” said Gideon Skinner, senior director of U.K. politics at Paris-based Ipsos. “The stark decline in the British public’s belief in the ‘special relationship’ and the increasingly negative perception of U.S. influence suggests a potential cooling of transatlantic ties.”