After global stock markets took another severe tumble on Monday, U.S. President Donald Trump said his administration was “not looking at” a pause in tariffs even as fears over those duties might lead to a global economic slowdown.
“We’re not looking at that, we have many, many countries that are coming to negotiate deals with us and they’re going to be fair deals, and in certain cases they’re going to be paying substantial tariffs, they’ll be fair deals,” Trump told reporters in the Oval Office.
Asked about comments by his administration suggesting negotiations were possible, while some officials have said the tariffs could be permanent, Trump said both “can both be true.”
“There could be permanent tariffs and there can also be negotiations because there are things we need beyond tariffs,” he said.
Trump went on to say some of those things were “open borders” with countries like China for better trading deals.
Earlier in the day, European and Asian shares saw dramatic losses, the leading U.S. index also flirted with bear market territory in pre-market trading, and oil prices sagged.
The S&P 500 slipped 0.2 per cent at the end of a day full of heart-racing reversals as battered financial markets try to figure out what Trump’s ultimate goal is for his trade war. If it’s to get other countries to agree to trade deals, he could lower his tariffs and avoid a possible recession. But if it’s to remake the economy and stick with tariffs for the long haul, stock prices may need to fall further.
The Dow Jones Industrial Average fell 349 points, or 0.9 per cent, and the Nasdaq composite edged up by 0.1 per cent.
Even some of Trump’s allies are raising alarms about the economic damage, and financial forecasts suggest more pain on the horizon for U.S. businesses, consumers and investors.
Billionaire Trump supporter Bill Ackman warned on Sunday about an “economic nuclear winter,” while calling for a 90-day pause on tariffs.
“The President has an opportunity on Monday to call a time out and have the time to execute on fixing an unfair tariff system,” Ackman said in a post on X, formerly known as Twitter.
“Alternatively, we are heading for a self-induced, economic nuclear winter, and we should start hunkering down. May cooler heads prevail.”
The massive sell-off in riskier assets at the start of the trading week follows President Donald Trump’s announcement of sharply higher U.S. import taxes and retaliation from China that saw markets fall sharply Thursday and Friday.
Trump threatened he would impose an additional 50 per cent in tariffs on China Monday afternoon if it did not stand down on its own planned retaliation over last week’s “reciprocal” duties.
“They’ve gone for years, they’ve become a rich country because of people again that were in the White House that allowed this to happen,” Trump said. “I’ve great respect for China, but they can’t do this. We’re going to have one shot at this … it’s an honour to do it because we have been just destroyed.”
Canada was spared from the latest round of tariffs but already faces levies on a number of exports to the U.S. including steel and aluminum. It has enacted retaliatory tariffs on a swath of American goods.
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The Canadian dollar traded for 70.29 cents US compared with 70.34 cents US on Friday.
Tokyo’s Nikkei 225 index lost nearly eight per cent shortly after the market opened and futures trading for the benchmark was briefly suspended. It closed down 7.8 per cent at 31,136.58.
European shares followed Asian markets lower, led by Germany’s DAX index, which briefly fell more than 10 per cent at the open on the Frankfurt exchange, but recovered some ground to move down 5.8 per cent in morning trading.
In Paris, the CAC 40 shed 5.8 per cent, while Britain’s FTSE 100 lost 4.9 per cent in the European morning.
U.S. futures signaled further weakness ahead.
All three indexes started the day sharply lower, and the Dow plunged as many as 1,700 points following even worse losses elsewhere in the world. But it suddenly surged to a gain of nearly 900 points in the late morning. The S&P 500, meanwhile, went from a loss of 4.7 per cent to a leap of 3.4 per cent, which would have been its biggest jump in years.
However, after opening lower, the Dow and S&P saw a sudden gain after a false rumour began circulating on social media that Trump was considering a 90-day pause on his tariffs. That rumour was quickly squashed by the White House, labelling it “fake news,” which prompted stocks to turn back down.
On Friday, the worst market crisis since the COVID-19 pandemic shifted into a higher gear as the S&P 500 plummeted six per cent and the Dow plunged 5.5 per cent.
The Nasdaq composite dropped 3.8 per cent.
“There’s no sign yet that markets are finding a bottom and beginning to stabilize,” wrote Deutsche Bank analysts in a research note.
Trump suggests turmoil is ‘medicine’
On Sunday Trump told reporters aboard Air Force One that he does not want markets to fall. But he also said he wasn’t concerned about a sell-off, saying “sometimes you have to take medicine to fix something.”
Trump has given several reasons for his stiff tariffs, including to bring manufacturing jobs back to the United States, which is a process that could take years. Trump on Sunday said he wanted to bring down the numbers for how much more the United States imports from other countries versus how much it sends to them.
Still, indexes kept swerving between losses and gains Monday, even after Trump threatened to raise his tariffs, because hope still remains in markets that negotiations may still come.
“Could things get worse? Of course they could,” said Nate Thooft, a senior portfolio manager at Manulife Investment Management. “We’re not calling the all-clear at all, but when you have this type of volatility in the market, of course you’re going to have back and forth” in markets not just day to day but also hour to hour.
“We’re all waiting for the next bit of information,” he said. “Literally a Truth Social tweet or an announcement of some sort about real negotiations could dramatically move this market. This is the world we live in right now.”
All that seems to be certain is that the financial pain hammered investments around the world on Monday, the third straight day of steep losses after Trump announced tariffs in his “Liberation Day.”
Stocks in Hong Kong plunged 13.2 per cent for their worst day since 1997. A barrel of benchmark U.S. crude oil dipped below $60 during the morning for the first time since 2021, hurt by worries that a global economy weakened by trade barriers will burn less fuel. Bitcoin sank below $79,000, down from its record above $100,000 set in January, after holding steadier than other markets last week.
Nike dropped four per cent for one of the larger losses on Wall Street. Not only does it sell a lot of shoes and apparel in China, it also makes much of it there. Last fiscal year, factories in China made 18% of its Nike brand footwear. Vietnam made 50 per cent, and Indonesia made 27 per cent.
Trump’s tariffs are an attack on the globalization that’s remade the world’s economy, which helped bring down prices for products on the shelves of U.S. stores but also caused production jobs to leave for other countries.
It also adds pressure on the Federal Reserve. Investors have become nearly conditioned to expect the central bank to swoop in as a hero by slashing interest rates during downturns.
All that seems to be certain is that the financial pain hammered investments around the world on Monday, the third straight day of steep losses after Trump announced tariffs in his “Liberation Day.”
Stocks in Hong Kong plunged 13.2 per cent for their worst day since 1997. A barrel of benchmark U.S. crude oil dipped below US$60 during the morning for the first time since 2021, hurt by worries that a global economy weakened by trade barriers will burn less fuel. Bitcoin sank below US$79,000, down from its record above US$100,000 set in January, after holding steadier than other markets last week.
Nike dropped 4% for one of the larger losses on Wall Street. Not only does it sell a lot of shoes and apparel in China, it also makes much of it there. Last fiscal year, factories in China made 18 per cent of its Nike brand footwear. Vietnam made 50 per cent, and Indonesia made 27 per cent.
Trump’s tariffs are an attack on the globalization that’s remade the world’s economy, which helped bring down prices for products on the shelves of U.S. stores but also caused production jobs to leave for other countries.
It also adds pressure on the Federal Reserve. Investors have become nearly conditioned to expect the central bank to swoop in as a hero by slashing interest rates during downturns.
Kurtenbach reported from Bangkok. Associated Press writers Ayaka McGill, Paul Harloff and Jiang Junzhe contributed.
with files from Associated Press reporters Chris Megerian and Josh Boak
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