On Monday, President Donald Trump delivered a bold message to Americans, urging them to be "strong, brave, and patient" in the face of economic reforms he has implemented since taking office. As the New York Stock Exchange prepared to open with another expected decline, Trump staunchly defended his global trade war.
"The United States has a chance to do something that should have been done DECADES AGO! Don't be weak! Don't be foolish! Don't be a PANICAN—a new party based on weak and stupid people!" Trump posted on X. "Be strong, brave, and patient, and GREATNESS will result!" he added.
Earlier, in another statement, Trump claimed that oil prices and interest rates were falling and criticized the Federal Reserve for moving too slowly, asserting they "should lower rates."
Trump rejected the notion of inflation, emphasizing that the U.S. had been "abused" for a long time but was now receiving substantial revenue from tariffs imposed on the abusers. "Food prices are dropping, THERE IS NO INFLATION, and the U.S., which has been abused for a long time, is now receiving billions of dollars weekly from abusive countries due to tariffs already in place," he stated.
The president didn't miss the chance to criticize China, labeling it the "greatest abuser of all." "China, whose markets are collapsing, just raised their tariffs by 34%, in addition to their ridiculously high long-term tariffs (and more!), ignoring my warning that abusive countries should not retaliate. They've gained enough over the decades, exploiting the good old USA!" he warned.
He concluded by blaming past leaders for allowing such issues to occur. "MAKE AMERICA GREAT AGAIN!" he declared.
Federal Reserve on High Alert
The U.S. Federal Reserve announced it would hold an extraordinary meeting of its Board of Governors today at 11:30 a.m. local Washington time (3:30 p.m. GMT) following a day of significant losses in Asian and European markets due to Trump's trade war. After the closed-door meeting, the board will release a statement on the topics discussed.
Since Trump announced a 10% global tariff along with higher rates for China and the European Union, markets have reacted with steep losses. China's response to Trump's tariffs has triggered a domino effect in global markets, raising fears of a worldwide recession.
U.S. media reports indicate that the Tokyo Stock Exchange plummeted nearly 8%, while Hong Kong's Hang Seng dropped 13.2%, marking its worst fall since the 2008 financial crisis. European markets opened with average losses of around 6%, though some have since moderated their declines. Wall Street began trading with losses around 4%.
In particular, major American tech firms, the backbone of Wall Street, experienced sharp corrections.
Dollar Opens Lower Today
The dollar index, measuring the greenback against six major world currencies, started the day with a 0.13% depreciation. The euro rose 0.24% against the dollar, while the pound fell 0.35%. Bitcoin, the leading asset in the cryptocurrency market, dropped 7.0%, losing investor interest.
U.S. benchmark WTI oil, which influences Mexican crude prices, fell 2.4% following a significant price cut by Saudi Arabia on its light crude. Performance in metals and grains also remained negative.
Contrary to Trump's statements, JPMorgan Chase & Co., the world's largest investment bank, forecasts a GDP contraction, high inflation, and rising unemployment, driven by the current administration's new trade policy. They have sounded the alarm, predicting an economic recession in the U.S. in the second half of 2025.
Additionally, a report from Tax Foundation, a non-partisan think tank based in Washington, highlighted that the new "reciprocal" tariffs announced by President Trump would result in an average increase of more than $2,100 in annual household spending for Americans this year.
Understanding the Economic Implications of Trump's Trade Policies
What are the effects of Trump's tariffs on the U.S. economy?
Trump's tariffs have led to increased prices for consumers, potential trade wars with other nations, and volatility in global markets. These actions have raised concerns about a potential economic recession.
How has China responded to U.S. tariffs?
China has retaliated by imposing their own tariffs on U.S. goods, which has escalated tensions and contributed to the instability in global markets.
What is the outlook for the U.S. economy according to JPMorgan Chase & Co.?
JPMorgan Chase & Co. forecasts a potential recession in the U.S. by the second half of 2025, with concerns of high inflation and unemployment driven by the current trade policies.
How might Trump's trade policies affect American households?
The new tariffs could lead to increased costs for American families, with an average rise of over $2,100 in annual spending per household.