Trump’s Tariff War Tanks Stock Market Even Further

The Dow Jones plunged more than 2,000 points, or 5.1 percent, Friday as investors reacted to China’s retaliatory tariffs. The drop-off followed a 1,679-point decline the day before.

Beijing’s Commerce Ministry announced it would impose a 34 percent tariff on imports of all U.S. products as soon as April 10, matching the 34 percent tariff that Donald Trump announced he would impose on Chinese imports as part of his “Liberation Day” tariff strategy.

Despite publicly celebrating the enforcement of his plan, the U.S. president’s nonsensical economic strategy has tanked markets in just two days.

Wall Street’s “fear gauge,” the CBOE S&P 500 Volatility Index (VIX), jumped to 44.4 by Friday afternoon—a 22.8-point jump since Wednesday, and a 26.5-point jump since the beginning of the year, according to data compiled by The Wall Street Journal, putting the economy on track for a bear market.

In a note to investors, JP Morgan said that Trump’s tariffs had a 40 percent chance of slingshotting the U.S. economy into a recession. JP Morgan underscored that the tariffs would cause a price surge—adding two percent to the Consumer Price Index—and additionally raise taxes on Americans by $660 billion a year, “the largest tax increase in recent memory by a longshot,” CNN reported Thursday.

“The impact on inflation will be substantial,” the analysts said, according to the network. “We view the full implementation of these policies as a substantial macroeconomic shock.”

Beyond the economic devastation, Trump’s tariffs have also landed the U.S. in legal hot water. China also announced Friday it would be suing the U.S. via the World Trade Organization, arguing that Trump’s tariff plan “seriously undermines” global trade.

“The United States’ imposition of so-called ‘reciprocal tariffs’ seriously violates WTO rules, seriously damages the legitimate rights and interests of WTO members, and seriously undermines the rules-based multilateral trading system and international economic and trade order,” the Commerce Ministry said. “It is a typical unilateral bullying practice that endangers the stability of the global economic and trade order. China firmly opposes this.”

The Trump administration is also facing lawsuits over the sweeping tariff plan at home.

The New Civil Liberties Alliance sued the president Thursday, claiming that Trump’s decision to invoke the International Emergency Economic Powers Act to enforce the tariffs—which impacts trade with some 200 countries—did not give him the power to “usurp” Congress’s right to control tariffs or “upset the Constitution’s separation of powers.”

In a press release, the right-wing group (which has financial ties to Leonard Leo and the Koch network) argued that the emergency statute “authorizes specific emergency actions like imposing sanctions or freezing assets to protect the United States from foreign threats.”

“It does not authorize the President to impose tariffs,” the NCLA wrote.

President Donald Trump has once again swooped in to save TikTok, after the president’s sweeping tariffs undermined a deal with China.

“My Administration has been working very hard on a Deal to SAVE TIKTOK, and we have made tremendous progress,” Trump wrote on Truth Social Friday.

The president said that he planned to sign an executive order to delay the enforcement of the U.S. TikTok ban for an additional 75 days.

Trump continued to say that U.S. officials hoped to continue negotiations with China, “who I understand are not very happy about our Reciprocal Tariffs.”

“This proves that Tariffs are the most powerful Economic tool, and very important to our National Security! We do not want TikTok to ‘go dark.’ We look forward to working with TikTok and China to close the Deal. Thank you for your attention to this matter,” Trump wrote.

Trump appeared to suggest that his “reciprocal tariff” policy, which placed a baseline 10 percent tariff on nearly every country in the world, was some kind of chip in negotiations over TikTok’s parent company, Beijing-based ByteDance. In 2024, Congress passed a law that required the firm to sell TikTok’s U.S. operations to a non-Chinese owner, or see it banned in the U.S. Trump has now swooped in twice to rescue the app from going dark (after putting it on Congress’s radar in the first place).

In reality, Trump’s decision to impose steep tariffs on China has only gotten in the way of negotiations. The White House had nearly reached an agreement with China on TikTok, but the country hit the breaks after Trump’s tariff announcement Wednesday, the Associated Press reported.

After Trump imposed a 34 percent tariff on Chinese imports to the U.S. earlier this week, in addition to two previous rounds of 10 percent duties, China responded in kind, levying its own 34 percent tariff on all imports from the U.S. on Friday.

In 2024, the U.S. imported $438.9 billion worth of Chinese goods, and China imported $143.5 worth of American goods, according to the U.S. trade representative.

Trump previously signed an executive order in January to keep the app running for U.S. users for 75 days, “to permit my Administration an opportunity to determine the appropriate course of action with respect to TikTok.” The grace period was set to expire Saturday, April 5.

This story has been updated.

Then they came for the gamers: Nintendo is delaying preorders of the Switch 2 in the wake of Trump’s sweeping, unprecedented tariffs on the entire world. Experts, meanwhile, think the device’s high cost is a direct result of the company anticipating the devastating effect of tariffs.

“Pre-orders for Nintendo Switch 2 in the U.S. will not start April 9, 2025 in order to assess the potential impact of tariffs and evolving market conditions. Nintendo will update timing at a later date,” Nintendo said in a statement from IGN. “The launch date of June 5, 2025 is unchanged.”

The Switch is manufactured in China and Vietnam, countries that Trump placed 34 percent and 46 percent tariffs on, respectively. The Switch 2 is perhaps the most anticipated gaming console release of the year, as the first iteration was the third-bestselling gaming console of all time.

Trump’s tariffs have gamers everywhere bracing for aggressive price increases. “There’s no doubt that Nintendo and Sony bumped prices higher initially to pre-empt potential tariffs,” Niko Partners analyst Daniel Ahmad wrote on X. “They are indeed higher than expected, but I wouldn’t expect the % price increase to be exactly in-line with the tariff.

“When [graphics processing unit] prices increased in February that’s because tariffs on China were 10%. When they increased again in March that’s because they were 20%,” he continued. “Now they’re 54% for China and other Asia markets incl. Vietnam are 46%. Unless reversed, expect all gaming hardware to see jumps.”

Others speculated that Nintendo waited until the very last minute to decide on a price increase due to the intense uncertainty surrounding the tariffs.

“Nintendo appears to be building in a buffer against these potential trade barriers while ensuring they maintain their traditional positive margin on hardware,” NYU professor Joost van Dreunen told IGN. “My view is that they probably had a range of pricing for the U.S. market in play up until the last minute due to the uncertainty on import tariffs.”

This reinforces the very basic economic concept of tariffs being a tax on the consumer more than anything else. And when used as wantonly and spitefully as Trump is using them, the price of everything, everywhere, shoots up.

A fifth of the jobs slashed at the Department of Health and Human Services were actually a mistake, Health Secretary Robert F. Kennedy Jr. said.

Under the direction of Elon Musk’s Department of Government Efficiency, the health agency fired some 10,000 employees this week in an ongoing government reduction effort that Kennedy has said could downsize his department’s 82,000-employee workforce by as much as a quarter.

But by Kennedy’s own admission, that process is apparently so haphazard, rushed, and inefficient that it basically has to involve major mistakes that undermine the department’s work.

“Personnel that should not have been cut, were cut,” Kennedy told reporters on Thursday. “We’re reinstating them. And that was always the plan. Part of the DOGE, we talked about this from the beginning, is we’re going to do 80 percent cuts, but 20 percent of those are going to have to be reinstated, because we’ll make mistakes.”

Kennedy noted that some of the employees affected were not in administrative roles, as DOGE had promised, and that the layoff had affected the agency’s research work. One such program included a team of researchers at the Centers for Disease Control and Prevention that monitors lead exposure in children.

“There were some programs that were cut that are being reinstated, and I believe that that’s one,” Kennedy said.

Other shuttered departments were responsible for research and policy recommendations on older adults, disabilities, HIV, minority health, mine safety, and smoking. It is unclear if these are among the research priorities that will return.

The negligent error is just one recent instance in which the “shock and awe” of the Trump administration’s federal makeover has resulted in dud details and mass confusion.

Since January, the Trump administration has fired more than 100,000 federal employees, killing the Education Department and attacking the Environmental Protection Agency. Mass layoffs were also conducted at the Department of Energy in February, where DOGE similarly and mistakenly nixed critical workers focused on nuclear safety.

Bringing those employees back wasn’t as easy as simply having them return to work the next day. Instead, dejected and “shell shocked” employees at the semiautonomous National Nuclear Security Administration were reportedly considering early retirement or looking for work in more stable sectors, unsure if or when the Trump administration might try to dismiss them again, according to The Bulwark.

But tens of thousands more government jobs are expected to be on the chopping block as Trump pursues a second round of “voluntary” buyouts in the coming weeks.

The former commissioner of the Food and Drug Administration, Robert Califf, condemned the Health Department layoffs in a statement on LinkedIn.

“The FDA as we’ve known it is finished, with most of the leaders with institutional knowledge and a deep understanding of product development and safety no longer employed,” Califf wrote, describing the action as “a dark day for public health.”

Donald Trump is defending his tariff plan with poorly sourced hype videos.

The president shared an X video, a copy of a TikTok post, to his Truth Social account Friday morning calling his economic plans “genius” without much substance. The video starts out by saying Trump is crashing the economy on purpose and that billionaire investor Warren Buffett is praising the president for making “the best economic moves he’s seen in 50 years.”

This isn’t true at all, though. Last month, Buffett openly called Trump’s tariffs “a tax on goods” in an interview.

“Tariffs are actually, we’ve had a lot of experience with them. They’re an act of war, to some degree,” Buffett said. “I mean, the tooth fairy doesn’t pay ’em! And then what? You always have to ask that question in economics. You always say, ‘And then what?’”

Trump’s video goes on to make several other unsourced claims, including that the Federal Reserve will be forced to slash interest rates in May, allowing trillions of dollars in debt to be refinanced inexpensively. The video also claims that the dollar will be weakened and that mortgage rates will drop, and repeats Trump’s claims that tariffs will compel businesses to build in the U.S. and force farmers to sell more crops stateside as well. There is no indication that any of this will happen. Indeed, Trump is practically begging—or maybe threatening—Federal Reserve Chair Jerome Powell to slash rates.

The video shows that Trump is deluded that his tariffs are going to succeed and is pushing any source that backs him up. The TikTok account that the video comes from lacks credibility, as it doesn’t even have a bio and seems to only post summary videos of news events without any indication of who is making them. Meanwhile, the stock market continues to plummet and Americans continue to worry about their jobs.

Treasury Secretary Scott Bessent may be planning to cut and run after Donald Trump’s disastrous “reciprocal tariff” announcement earlier this week.

During an appearance on MSNBC’s Morning Joe Friday, contributor Stephanie Ruhle reported that the key Cabinet member is already looking for an escape hatch.

“My sources say that Scott Bessent is kind of the odd man out here and, in the inner circle that Trump has, he’s not even close to Scott Bessent or listening to him,” Ruhle said. “Some have said to me, he’s looking for an exit door to try to get himself to the Fed, because in the last few days he’s really hurting his own credibility and history in the markets.”

To be sure, Trump’s tariff policy represents a sort of defeat for Bessent, a former hedge fund manager who entered office under the delusion that he might actually succeed in stopping Trump from wrecking the economy. Should he flee the administration now, he would likely forfeit what little credibility remains.

Bessent warned other countries Wednesday not to make any rash decisions in reaction to Trump’s sweeping “retaliatory tariff” policy, which included a 10 percent baseline tariff on almost every country in the world.

“My advice to every country right now is: Do not retaliate. Sit back, take it in, let’s see how it goes. Because if you retaliate, there will be escalation. If you don’t retaliate, this is the high-water mark,” he warned.

Bessent’s warning came off particularly clueless given that democratically elected foreign leaders are likely beholden to their electorate, who won’t take lightly to Trump’s blatant bullying.

Ruhle’s sources told her Bessent must understand just how ridiculous Trump’s tariff policy is because he “actually understands how the markets work, and what’s happening right now is only going to hurt markets,” she said.

And it already has: The Dow Jones Industrial Average and Nasdaq Composite experienced their single worst sessions since 2020 on Thursday. Bessent’s nomination had received strong Republican support because of his experience with financial markets.

“And even for Scott Bessent to say a few weeks ago, you know, getting cheap goods fast is ‘not part of the American dream.’ No, it’s not part of the American dream, but it’s part of the way Americans live, especially people who are economically vulnerable,” Ruhle said. “They don’t have the option to say, ‘No, I’d like higher things that cost more.’ They need low-cost things because they don’t make that much money.”

Already, countries are ignoring Bessent’s weak warning. China announced Friday that it would impose a reciprocal 34 percent tariff on all imports from the U.S. Trump had levied two rounds of 10 percent duties on all Chinese imports, and then an additional 34 percent tariff on Wednesday. It’s easy to see how prices can quickly add up for working- and middle-class Americans who have relied on cheap products from countries like China.

Before he was nominated to serve in the Trump administration, Bessent had defended the use of tariffs as a form of sanctions. He told Bloomberg in August that tariffs were a “one-time price adjustment” and were “not inflationary.”

“I think that tariffs in a way can be regarded as an economic sanction without a sanction. If you don’t like Chinese economic policy, flooding the market with over production, you could put a sanction on them, or a tariff,” Bessent said at the time.

Donald Trump is looking for a scapegoat to redirect America’s tariff fury.

The president attempted to influence Federal Reserve Chairman Jerome Powell ahead of the head banker’s remarks Friday, insisting that the chairman should cut interest rates.

“This would be a PERFECT time for Fed Chairman Jerome Powell to cut Interest Rates,” Trump posted on Truth Social. “He is always ‘late,’ but he could now change his image, and quickly.”

Trump then claimed that energy prices, interest rates, inflation, and egg prices are down. (Energy prices, interest rates, and inflation are actually not down. Egg prices, however, are $3 a dozen again.) The president also claimed that jobs are “up,” likely referring to the jobs report he celebrated earlier Friday that assessed positive job growth in the U.S. economy before he implemented tariffs that cratered the stock market.

“A BIG WIN for America,” Trump wrote. “CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!”

Rate cuts, however, would not be an imminent and forthcoming solution to the market chaos, according to the chairman.

“We don’t need to be in a hurry,” Powell said later Friday. “We are well positioned to wait for greater clarity before considering any adjustments to our policy stance. It is too soon to say what will be the appropriate path for monetary policy.”

Overall, Powell’s speech did not spell good news in the wake of Trump’s sweeping tariff plan. Powell described Trump’s tariffs as “significantly larger than expected” and predicted that the levies would contribute to—at minimum—a “temporary rise in inflation,” though he noted that the “effects could be more persistent.”

The decision to cut interest rates or not was a major sticking point between Trump and Powell toward the end of Trump’s first term, when the Covid-19 pandemic sent the economy on a roller-coaster ride.

Economists have predicted that the tariffs could throw the U.S. into a recession. Trump’s plan has been interpreted around the globe as an economic attack, forcing the leaders of some of America’s longest-term allies to turn away from U.S. leadership.

“The global economy is fundamentally different today than it was yesterday. The system of global trade anchored on the United States … is over,” Canadian Prime Minister Mark Carney said Thursday, as if delivering a eulogy for the two nations’ relationship, the day after Trump unveiled the plan.

“Our old relationship of steadily deepening integration with the United States is over,” Carney said. “The 80-year period when the United States embraced the mantle of global economic leadership, when it forged alliances rooted in trust and mutual respect, and championed the free and open exchange of goods and services, is over.”

A new poll has Representative Alexandria Ocasio-Cortez handily beating Senator Chuck Schumer head-to-head in the 2028 New York primary.

Fifty-five percent of likely Democratic voters preferred Ocasio-Cortez according to the survey, which was conducted by the liberal group Data for Progress, while 36 percent preferred Schumer. Nine percent went undecided.

This underscores the reputational damage Schumer has taken in the early days of Trump’s second term, particularly after he decided to advance a GOP spending bill without seeking concessions rather than shut down the government, completely capitulating to Elon Musk and Donald Trump’s extremist agenda. Schumer argued that shutting the government down was a worse look than giving Trump a blank check, but the Democratic base disagrees.

“I think that’s absolutely wrong. Republicans control the House, they control the Senate, they control the Oval Office. They’d be voting against our measure to keep the government open,” Senator Jeff Merkley said at the time. “I think America would understand that this is a Republican shutdown, if there was a shutdown.… You don’t stop a bully by handing over your lunch money, and you don’t stop a tyrant by giving them more power.”

This poll also emphasizes the ideological struggle that rages on within the Democratic Party. While Schumer and other moderates cancel book tours and blame the party’s “woke” left, Ocasio-Cortez had been barnstorming towns with Bernie Sanders, railing against oligarchy and making the progressive case for the party’s future.

Schumer’s approval rating among Democrats is currently 48 percent, the lowest it’s been since 2019.

Senator Ted Cruz apparently has a limit on what he will tolerate from President Trump, and tariffs cross it.

The Trump sycophant told Fox Business’s Larry Kudlow Thursday that he didn’t think the president’s insane tariffs were a good idea, calling them “a tax on consumers.”

“I’m not a fan of jacking up taxes on American consumers,” Cruz said. “So my hope is these tariffs are short-lived and they serve as leverage to lower tariffs across the globe.

“Look, I think it is a mistake to assume that we will have high tariffs in perpetuity. I don’t think that would be good economic policy,” Cruz added. “I am not a fan of tariffs.”

Cruz qualified his comments, saying that if the tariffs cause trading partners to “dramatically reduce the tariffs they charge on U.S. goods, and services, and the consequence of that is the U.S. government dramatically cuts the tariffs that were announced yesterday, that would be a great outcome.

“But if the result is our trading partners jack up their tariffs and we have high tariffs everywhere, I think that is a bad outcome for America,” said the Texas senator.

Cruz’s mild criticism shows that even he sees the danger in blowing up the economy over a half-baked idea. Ever since his loss to Trump in the 2016 Republican presidential primary, Cruz has almost slavishly supported the president, even after Trump called his wife ugly and linked Cruz’s father to the John F. Kennedy assassination. But the Texas senator knows that tariffs will hurt his constituents, who depend on trade with Mexico, living in a border state. The question is whether he and his fellow Republicans are prepared to take legislative action over it.

Republicans aren’t happy about Donald Trump’s tariffs tanking the stock market.

In an appearance on Fox Business Friday, Senator Ron Johnson said he was worried about the direction the market was headed, after Trump’s announcement of sweeping “reciprocal tariffs” caused the Dow Jones Industrial Average to experience its biggest wipeout since 2020.

“From my standpoint, I’m certainly concerned about what’s happening right now in the markets, and I hope the administration is looking at it as well,” Johnson said.

Johnson noted that while Trump was convinced that tariffs were the answer to the country’s economic woes, “what’s also indisputable is the markets are down about 8 percent in just two days.

“I’m getting all kinds of reactions from businesses, farmers in Wisconsin that are highly concerned about what’s happening. So, those are the facts; all I can really do is report the reality to the administration, let them know how these actions are impacting my constituents,” he said.

Johnson said Trump’s tariff policy was a “bold, risky move.” Meanwhile, analysts at JP Morgan have raised their recession forecasts for the next year from 40 percent to 60 percent.

Unfortunately for the Wisconsin Republican, Trump seemed completely unbothered by the major stock market tumble.

“I think it’s going very well,” the president told reporters Thursday. “It was an operation like when a patient gets operated on, and it’s a big thing. I said this would be exactly the way it is.

“The markets are going to boom, the stock is going to boom, the country is going to boom, and the rest of the world wants to see, is there any way they can make a deal?” Trump added.

While White House aides have insisted that the administration is not open to negotiating on tariff rates, Trump has begun signaling that he is willing to cut deals, according to CNBC.

Trump’s new tariff policy is so unpopular in the Senate that it’s actually bringing together Democrats and Republicans.

On Wednesday night, the Senate passed a rare bipartisan rebuke of Trump, with four Republican senators joining the Democrats to approve a resolution that would limit the president’s ability to impose tariffs on Canada.

Senator Rand Paul appeared on Fox News Wednesday beside Democratic Senator Tim Kaine to criticize Trump’s tariffs, specifically the 25 percent tariff imposed on imports from Canada.

“Trade is proportional to wealth. The last 70 years of international trade has been an exponential curve upward, and the last 70 years of prosperity has been upward also,” the Kentucky Republican said. “We are richer because of trade with Canada, and so is Canada.”

Republican Senator John Kennedy of Louisiana told CNN’s Manu Raju Wednesday that he was concerned about Trump’s decision to play the long game.

“In the long run, we’re all dead. Short run matters too,” Kennedy said. “Nobody knows what the impact of these tariffs is going to be on the economy.”

Republican Senator Thom Tillis of North Carolina warned that the economic pain threshold wasn’t the same for everyone. “Anyone who says there may be a little bit of pain before we get things right, needs to talk to my farmers who are one crop away from bankruptcy,” Tillis said.

On Thursday, Republican Senator Chuck Grassley co-sponsored a bill with Senator Maria Cantwell, a Democrat, that would allow Congress to review Trump’s tariffs. If passed, the Trade Review Act of 2025 would require Trump to give Congress 48 hours notice of tariffs he planned to impose and provide a 60-day window for Congress to approve the tariff or else have it scrapped.

In a post on X Thursday, Grassley insisted that his support of the bill was not a response to Trump’s tariffs. “If u r trying to make the Trade Review Act about current events/Trump tariffs U R MISSING THE MARK I’ve long expressed my view that congress has delegated too much authority on trade to the executive branch under Republican & Democrat presidents,” he wrote.