The U.S. stock market experienced another day of turbulent trading on Monday. False reports about a potential tariff reprieve sent stocks gyrating. President Trump’s threat of additional tariffs on China later restored fears of a severe economic downturn.
Trump issued a new ultimatum to China, demanding the rescission of its retaliatory tariffs on the United States. Governments worldwide scrambled to schedule phone calls, send delegations to Washington, and submit proposals to lower their import taxes to escape the tariffs. Contradicting signals from Trump and his advisers have added to the uncertainty about the potential for negotiation.
Trump’s trade war has made investors increasingly pessimistic about the economy. However, he has defended his global tariffs, claiming they have already brought significant revenue to the United States. The S&P 500, the benchmark U.S. index, swung between steep losses and gains before ending down 0.2 percent.
Shares in Asian and European markets had also fallen sharply earlier. The recent rout in global markets reflects a deepening concern. Trump’s significant new taxes on U.S. imports could disrupt global supply chains, accelerate inflation, and set off a severe economic downturn.
Ed Yardeni, a veteran Wall Street analyst, said, “This one is likely to last a while given the Trump administration’s intransigence on the issue of tariffs. The stock market believes this is a disastrous policy.
Trump suggested that the Federal Reserve should cut interest rates, a suggestion that the Fed chairman has warned could fuel inflation. Trump has maintained that his steep new import taxes would lead to higher prices, calling them “a very beautiful thing.”
Several Asian countries sought a reprieve from the tariffs.
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Bangladesh and Vietnam asked Trump to delay imposing the tariffs, while the Philippines said it would reduce tariffs on goods coming from the United States. South Korea and Japan expressed interest in meeting with the Trump administration.
Walmart’s investor event in Dallas on Wednesday aimed to showcase the company’s strengths and strategy for growth. It coincided with the day the U.S.-imposed tariffs went into effect worldwide. Doug McMillon, Walmart’s chief executive, acknowledged the uncertainty created by the tariffs.
“There’s so many variables playing out in terms of what costs are going to be, where people source from. We’re going to have to manage this as we always do, daily,” he said. As the event got underway, the United States had imposed worldwide tariffs, including a 104 percent levy on Chinese goods.
China quickly retaliated with 84 percent tariffs on U.S. goods. McMillon emphasized that Walmart was well placed to cope with uncertainty, having navigated previous crises. John David Rainey, Walmart’s chief financial officer, noted that two-thirds of what Walmart sells in the United States is made, grown, or assembled domestically.
In an afternoon interview, Treasury Secretary Scott Bessent signaled that Trump is ready to negotiate. He advised foreign officials to “keep your cool, do not escalate, and come to us with your offers.” This contradicted earlier statements by Peter Navarro, a White House trade adviser, who said there would be no negotiations. The major U.S. stock indexes entered the week following a two-day rout that caused the S&P 500 to register its worst week since March 2020.
The tech-heavy Nasdaq Composite index ended slightly higher despite the day’s dramatic swings. Trump insisted, “Tariffs will make this country very rich,” though many Americans may not be feeling that way right now.
Image Credits: Photo by Jason Briscoe; Unsplash
