Trump is determined in the trade war: another tax threat to China.

The U.S. President is not stepping back as stock markets rapidly lose value and recession fears grow.

U.S. President Donald Trump stated on Monday that he would impose new tariffs on China if the country retaliates. This has heightened concerns about a trade war. This threat came after China announced it would respond to the U.S. tariffs announced last week. In a statement on the social media platform Truth Social, Trump said, "If China does not withdraw the 34% increase it has implemented by tomorrow (April 8, 2025), the U.S. will impose an additional 50% tax on China starting April 9." He also added, "All contacts regarding the talks that China has requested from us will also come to an end!" The U.S. President is not stepping back as stock markets rapidly lose value and recession fears grow. Trump wrote in response to criticisms, "Be strong, brave, and patient; the result will be GREAT!" On the first trading day of the week, the Dow Jones Industrial Average fell by 1,200 points, while the S&P 500 approached a bear market (a downward trend). Even some of Trump's allies have warned about the economic damage, and experts foresee more challenges for U.S. companies, consumers, and investors. Republican President Trump argues that the tariffs he has imposed are necessary for the rebalancing of global trade and the revitalization of domestic production. He has blamed past leaders for this situation, claiming that other countries have 'exploited' the U.S. for years. He labeled China as the 'biggest abuser' and sharply criticized the tariffs imposed by Beijing in retaliation. Trump also called on the U.S. Federal Reserve (Fed) to lower interest rates. However, Fed Chair Jerome Powell warned last Friday that the tariffs could increase inflation, stating, "Everyone, including us, is waiting to see." Markets predict that the Fed will lower the benchmark interest rate at least four times by the end of the year. This means that fears of inflation will give way to concerns about layoffs and economic contraction. Trump spent the weekend at his Mar-a-Lago club in Florida. He visited his own facility in Miami for a golf tournament funded by Saudi Arabia on Thursday night and played golf at two separate properties over the weekend. On Sunday, he shared a video showing himself playing golf and told reporters aboard Air Force One that he had won the club championship. "Winning is nice," he said, adding, "You heard it, right? I won." Despite the turbulence in global markets, Trump stated he would not back down from the tariffs, saying, "Sometimes it takes medicine to fix something."

'Even if there is a step back, a recession is likely' Goldman Sachs stated that even if Trump steps back, a recession is now more likely. The report stated, "The sharp tightening of financial conditions, foreign consumer boycotts, and increased uncertainty will lead to a greater-than-expected decline in capital spending, which will severely slow economic growth." European Commission President Ursula von der Leyen expressed that the European Union will now focus on trade with countries outside the U.S., stating that there are 'big opportunities' elsewhere. Trump mentioned that he is in talks to initiate trade negotiations with Japanese Prime Minister Shigeru Ishiba. On Truth Social, he complained, "They treated the U.S. very poorly. They don’t buy our cars, but we buy millions of theirs." Ishiba told Trump that he was deeply concerned that these tariffs would deter investment from Japan. Japan had been the largest investor in the U.S. over the past five years. Ishiba described the situation as a 'national crisis' and stated that they would negotiate with Washington for a reassessment of the tariffs. White House trade advisor Peter Navarro said that merely reducing tariffs would not be sufficient, and countries need to make structural changes in their tax and regulatory systems. Speaking on CNBC, Navarro said, "For example, Vietnam. When they come in saying 'zero tariffs', it means nothing to us because the issue is non-tariff fraud." Today, Trump will host the Los Angeles Dodgers baseball team at the White House and hold a joint press conference with Israeli Prime Minister Benjamin Netanyahu.

There are criticisms from within as well Trump is trying to present a more united administration image after the internal strife during his first term, but economic turbulence has created rifts among his supporters. Noted investor Bill Ackman accused Secretary of Commerce Howard Lutnick of being 'indifferent while the stock market and economy collapse.' According to Ackman, Lutnick's former finance company, Cantor Fitzgerald, could profit from bond investments. Although Ackman apologized on Monday, he reiterated his concerns about the tariffs: "Our country and president have made significant economic progress, and now it is being jeopardized due to this flawed policy." White House Economic Advisor Kevin Hassett said in a statement to Fox News that Ackman needed to "speak a little more calmly." Hassett argued that the burden of tariffs would be borne by countries other than the U.S. Billionaire Elon Musk, one of Trump's advisors on government reforms, also expressed his doubts about the tariffs over the weekend. Musk, stating that Tesla's production costs would rise, said in a video conference with Italian politicians, "The U.S. and Europe should move to zero tariffs and thus create a free trade area in between." He indicated that this recommendation was a suggestion to the president. Navarro criticized Musk on Fox News, saying, "He doesn’t understand the situation. He just sells cars."