Stock markets in the US and worldwide continued sinking on Monday after the new US tariff policy began collecting duties and global trade tensions continued to rise.
President Trump and his top advisers dug in over the weekend, with the president suggesting that equity markets may need to “take medicine” and posting that the new tariffs are “already in effect, and a beautiful thing to behold.”
Trump also reiterated that the impetus behind the tariff policy is trade deficits: “I spoke to a lot of leaders… from all over the world. … I said ‘we’re not gonna have deficits with your country’ … to me a deficit is a loss. We’re gonna have surpluses or at worst we’re gonna be breaking even.”
On Monday morning, Trump dug in further: “Oil prices are down, interest rates are down (the slow moving Fed should cut rates!), food prices are down, there is NO INFLATION, and the long time abused USA is bringing in Billions of Dollars a week from the abusing countries on Tariffs that are already in place.”
Earlier on Sunday, administration officials defended President Trump’s plans across networks.
Commerce Secretary Howard Lutnick asserted that the tariffs “are definitely going to stay in place for days and weeks.” Treasury Secretary Scott Bessent said he did not expect a recession spurred by the tariffs, and top economic adviser Kevin Hassett insisted that Trump was not purposely trying to tank the stock market after the president reposted a video that claimed he was.
On April 2, Trump announced a blanket 10% tariff on all goods coming into the US. He also added new duties on goods from 185 countries, which the president described as the “worst offenders” in terms of perceived unfairness on trade, slated to kick in on April 9.
Read more: What are tariffs, and how do they affect you?
American customs officials began collecting the new 10% tariff on imports from many countries on Saturday morning after the US stock market saw its worst week since 2020. US futures dropped at the open on Sunday evening while bitcoin, seen as a proxy for risk, sold off.
Various countries are still deciding how to respond (or not), and companies have begun adjusting to the new reality — largely by raising prices. Some countries responded with new tariffs of their own: Canada announced new duties on certain vehicles imported from the US, and China announced that it will impose countermeasures against the US starting April 10, including a 34% tariff on US goods.
The European Union is reportedly preparing an initial set of countermeasures. The tariff rate applied to the 27-nation bloc of EU countries under the policy is 20%, and about 70% of the EU’s exports to the US are covered. Trump adviser and Tesla CEO Elon Musk, appearing at an event on Saturday, said that “Europe and the United States should move, ideally, in my view, to a zero-tariff situation.”
