Last week, the president imposed a 25 percent tariff on imports from Mexico and Canada while doubling levies on Chinese goods to 20 percent — only to announce two days later that he would delay some of those increases until April 2. A 25 percent tariff on steel and aluminum imports is also set to take effect on Wednesday.
Adding to the uncertainty, Trump has proposed a sweeping policy of reciprocal tariffs, under which every country would face equivalent duties on U.S. goods beginning in April. Economists warn the move could provoke broad retaliation, amplifying risks to an already fragile global economy.
The tariffs have already placed upward pressure on consumer prices, raising fears of stagflation — a toxic combination of high inflation and economic stagnation.
Market analysts caution that these policies significantly heighten the likelihood of a global trade war that could stymie economic growth.
In a Sunday morning interview that unsettled already jittery markets, Trump suggested an economic downturn might be imminent, describing a "period of transition" and emphasizing the scale of his trade policies. When pressed on the possibility of a U.S. recession this year, the president notably declined to rule it out.
"It takes a little time. It takes a little time," Trump said, comments that sent financial markets reeling the following day.
Major stock indexes plummeted, with the tech-heavy Nasdaq suffering its steepest decline in two and a half years, falling 4 percent to close at 17,436.10 on Tuesday. The Dow Jones Industrial Average and the S&P 500 also tumbled, losing 2.08 percent and 2.70 percent respectively on Monday, followed by additional declines of 1.14 percent and 0.76 percent on Tuesday.
Asian markets, particularly vulnerable to trade disruptions, also declined. South Korea's KOSPI fell 1.28 percent on March 11 amid concerns about the nation's export-driven economy.
A state-run economic institute projected a $44.8 billion decline in South Korean exports as a result of the tariffs. Japan's Nikkei slipped 0.64 percent, while Taiwan's Taiex dropped 1.73 percent as investors across the region weighed the potential fallout from escalating trade tensions.
Despite the market turbulence his remarks triggered, Trump struck a different tone on Tuesday during a White House appearance, dismissing fears of an economic downturn. "I don't anticipate a recession at all," he told reporters. "I think this country is going to experience a boom."
"Markets will go up and down, but we need to rebuild this country," he added, reaffirming his commitment to aggressive trade policies even as investors braced for continued volatility.
reporter
Kim Dong-young
davekim0807@ajupress.com
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