WASHINGTON (AP) — The global economy is showing its resistance to President Donald Trump’s tariffs. As these tariffs took effect, businesses raised alarms about a possible recession. Many of the U.S.’s major trading partners reacted by implementing their own import taxes, leading to jitters in the stock market after days of decline.
Trump’s tariffs, which include an eye-popping 104% on Chinese goods, 20% on products from the European Union, and 25% on South Korean imports, were activated shortly after midnight. Administration officials have attempted to reassure both voters and investors that these rates can be negotiated, but they admit it may take months to reach an agreement.
In typical scenarios of a looming downturn, investors flock to U.S. Treasury notes, viewing them as safe investments. However, this time, the situation is different. Treasury bond prices have dropped, causing the interest rate on the 10-year U.S. Treasury note to spike to 4.45%. This indicates increasing global skepticism about Trump’s economic strategies.
“The market is highly anxious about foreign investors pulling back from U.S. Treasury debt, leading to higher yields,” noted Gennadiy Goldberg, head of U.S. rates strategy at TD Securities. “The broader markets are awaiting signs of trade de-escalation. Without it, stabilization will be hard to achieve.”
Despite the stock market’s fluctuations, Trump expressed confidence. He even posted on Truth Social, calling it a “great time to buy” and reassured his followers that “everything will work out.” Yet, the reality is more complex. Economic conditions are influenced by a mix of domestic policies and unpredictable global factors, which have proven difficult for any president to control entirely.
Jamie Dimon, CEO of JPMorgan Chase, suggested that a recession is likely, although he also pointed out the expertise of his economists. He indicated that resolving tariff and trade disputes would be beneficial. Meanwhile, Delta Air Lines CEO Ed Bastian shared his concerns about the administration’s lack of strategic planning, which has resulted in uncertainty for his company. Delta had high hopes for 2025 but has now adjusted expectations downward due to the current chaos in economic planning.
Experts warn that the combination of negative consumer sentiment, corporate confidence issues, and instability in financial markets may push the economy into a recession. Joe Brusuelas, chief economist at consultancy RSM, stated that simultaneous shocks across various sectors could tip the economy into a downturn in the near term.
Feelings of uncertainty are echoed by Treasury Secretary Scott Bessent, who affirmed that it could take time to resolve trade issues but expressed optimism about a future rebound. He noted a strong interest from various countries, including Japan, South Korea, and India, seeking to engage in negotiations rather than escalate tensions.
However, opposition is mounting. China imposed an 84% tariff on U.S. goods, and Canada has matched the U.S.’s auto tariffs. The EU also enacted new taxes on U.S. products following Trump’s steel and aluminum tariffs. Trump is now considering additional tariffs on other goods, with announcements expected soon regarding taxes on imported drugs.
The situation is fluid and complex. As policymakers navigate these turbulent waters, the interplay of domestic and international economics will continue to shape the country’s economic landscape. Understanding these dynamics will be crucial as we move forward in an increasingly interconnected world.
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Donald Trump, China, Scott Bessent, Jamie Dimon, Ed Bastian, International trade, Economic policy, Financial markets, Economy, General news, Tariffs and global trade, AP Top News, European Union, Trump Media
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Technology Group, World news, U.S. Department of the Treasury, Recessions and depressions, Business, Joe Brusuelas, Government policy, Stocks and bonds, Delta Air Lines, Inc., United States government, JPMorgan Chase Co., Washington news, Gennadiy Goldberg, World News