US President Donald Trump cautioned foreign nations that they would need to pay “a lot of money” to remove extensive tariffs, describing the duties as “medicine” and inciting further turmoil in global financial markets.
Asian stocks experienced significant declines in early trading, and US stock market futures opened considerably lower as investors expressed concerns that Mr. Trump’s tariffs might result in increased prices, diminished demand, weakened confidence, and potentially a global recession.
While speaking to reporters aboard Air Force One, Mr. Trump indicated that he was unconcerned about the losses that have already erased trillions of dollars in value from stock markets globally.
“I don’t want anything to decline. But at times, you have to take medicine to remedy a situation,” he remarked as he returned from a weekend of golf in Florida.
“They are coming to the negotiating table. They wish to discuss matters, but there will be no discussion unless they pay us a substantial amount of money annually,” Mr. Trump stated.
A board displaying stock prices at the Taiwan Stock Exchange in Taipei showed all declines.
Mr. Trump’s tariff declaration last week shocked economies worldwide, prompting retaliatory tariffs from China and raising fears of a global trade war and recession.
Investors and political figures have grappled with whether Mr. Trump’s tariffs are a permanent fixture, part of a new strategy, or a negotiation tactic aimed at securing concessions from other nations.
On talk shows yesterday, Mr. Trump’s top economic advisors attempted to frame the tariffs as a strategic shift for the US in the global trade landscape.
Treasury Secretary Scott Bessent reported that over 50 nations had initiated negotiations with the US since last Wednesday’s announcement.
Commerce Secretary Howard Lutnick mentioned on CBS News’ ‘Face the Nation’ that the tariffs would stay in place “for days and weeks.”
Japan, one of the US’s closest allies in Asia, is among those seeking to reach a deal, but its leader noted that results “won’t be immediate.”
Investors, however, are not waiting around.
Tokyo’s Nikkei plummeted to a 1.5-year low, led by declines in stocks from the country’s banks—some of the largest lenders globally—which have lost nearly a quarter of their market value over the last three trading days.
The extensive market sell-off occurs as investors speculate that the rising risk of recession could prompt US interest rates to be cut as soon as May.
White House economic advisor Kevin Hassett attempted to quell fears that the tariffs were designed to pressure the US Federal Reserve into lowering interest rates, assuring that there would be no “political coercion” of the central bank.
JP Morgan economists now predict that the tariffs will lead to a decline of 0.3% in full-year US gross domestic product, down from a previous estimate of 1.3% growth, and that the unemployment rate will rise to 5.3% from the current 4.2%.
Billionaire fund manager Bill Ackman, who supported Mr. Trump’s presidential campaign, cautioned that the leader was losing the trust of business elites and warned of an “economic nuclear winter” unless he called for a timeout.
Read more: EU countries left grappling with implications of US tariffs
Tariff deals
US customs agents have begun collecting Mr. Trump’s unilateral 10% tariff on all imports from numerous countries.
Higher “reciprocal” tariff rates ranging from 11% to 50% on specific countries are set to take effect on Wednesday.
Several other governments have already indicated a willingness to engage with the US to prevent the duties.
Taiwan’s President Lai Ching-te proposed zero tariffs as a basis for discussions with the US, committing to eliminate trade barriers and stating that Taiwanese companies would increase their investments in the US.
Israeli Prime Minister Benjamin Netanyahu expressed his intention to seek relief from a 17% tariff on goods from his country during an upcoming meeting with Mr. Trump.
In Italy, Prime Minister Giorgia Meloni—an ally of Trump—promised to protect businesses adversely affected by a proposed 20% tariff on goods from the European Union.
Italian wine producers and US importers at a wine fair in Verona reported that business had already declined and feared more severe, long-lasting impacts.
