Trump doubles down on tariffs despite panic on Wall Street

Donald Trump dug in his heels on tariffs on Monday as financial markets whipsawed and a growing number of Wall Street titans expressed concern about the U.S. President’s attempt to upend the global trading system.

Mr. Trump’s sweeping tariffs on trading partners, announced last week, have rattled markets and begun inviting pushback from major figures in the world of business and finance who fear the U.S. economy is careening toward a self-inflicted downturn.

BlackRock chief executive Larry Fink said in an appearance Monday that the U.S. economy was “weakening as we speak” and that many executives he talks to “would say we are probably in a recession right now.”

Meanwhile, Jamie Dimon, CEO of JPMorgan Chase, warned in his annual letter to shareholders, published Monday, that “the recent tariffs will likely increase inflation and are causing many to consider a greater probability of a recession.”

S&P 500 ends lower, TSX slides deeper into correction territory, after wild session as Trump digs in on tariffs

So far, the warnings from Wall Street do not appear to have penetrated the White House. Mr. Trump doubled down on his support for tariffs on Monday and threatened an additional 50-per-cent levy on China in response to 34-per-cent retaliatory tariffs that Beijing announced against U.S. goods on Friday.

In an Oval Office press conference on Monday afternoon, Mr. Trump said he had no intention of pausing the tariffs announced last week, but said that he would be open to negotiation if other countries offered concessions on tariffs and other non-tariff trade barriers.

“There can be permanent tariffs and there can also be negotiations because there are things that we need beyond tariffs,” Mr. Trump said.

“We have many, many countries that are coming to negotiate deals with us, and they’re going to be fair deals, and in certain cases, they’re going to be paying substantial tariffs,” he added.

Mr. Trump’s decision to impose a baseline 10-per-cent duty on imports with higher rates for dozens of countries will push the United States’ average tariff rate to the highest level in a century, ripple through global supply chains and upend decades of trade liberalization. The baseline tariff came into force over the weekend and the country-specific tariffs will begin on Wednesday.

Investors have responded with panic.

Major U.S. stock indexes lost more than 10 per cent on Thursday and Friday and continued to fluctuate wildly into the new week.

The S&P 500 opened down around 4 per cent on Monday morning, before jumping a remarkable 8 per cent in a matter of minutes after a false report that Mr. Trump was pausing the tariffs for 90 days. Markets sold off after the White House denied the report, and the S&P 500 finished the trading day down 0.23 per cent.

The index has lost 17.6 per cent since a high in February while the Nasdaq Composite is down 22 per cent, putting it in bear-market territory. Other stock markets around the world have been hammered, including the S&P/TSX Composite, which has lost nearly 10 per cent since the U.S. tariff announcement last Wednesday.

Canada avoided the new baseline and country-specific tariffs, but is still being hit by tariffs on all goods that don’t comply with the United States-Mexico-Canada Agreement, as well as tariffs on autos, steel and aluminum. Canadian stocks have been battered by the broader deterioration of investor sentiment.

Mr. Fink of BlackRock, the world’s largest asset manager, warned that the market rout could have a real impact on the U.S. economy.

“When you see a 20-per-cent market decline in three days obviously it has significant impacts, and the ripple effects of the potential of tariffs is going to be long-standing,” Mr. Fink told an audience of executives at the Economic Club of New York.

“The reality is 62 per cent of Americans now invest in equities – the market impact is impacting Main Street,” he said. The turmoil “is going to freeze more and more consumption, I think we’re going to start seeing that really quickly.”

Even high-profile financial backers of Mr. Trump are getting nervous.

Billionaire hedge-fund manager Bill Ackman called Mr. Trump’s country-specific tariffs an “economic nuclear war” and urged a 90-day pause to negotiate deals.

If the U.S. proceeds as planned, Mr. Ackman said in a post on X on Sunday, “business investment will grind to a halt, consumers will close their wallets and pocket books, and we will severely damage our reputation with the rest of the world that will take years and potentially decades to rehabilitate.”

Elon Musk, the billionaire CEO of Tesla, who has been leading the U.S. administration’s efforts to cut the civil service, called for a “zero-tariff situation” between the United States and Europe, in sharp contrast to Mr. Trump’s plan to impose 20-per-cent tariffs on the European Union.

Countries and trading blocs around the world are responding to the U.S. in a variety of ways. China retaliated almost immediately with its own aggressive tariff measures, while the European Union and Japan have said they’re open to negotiating.

The EU offered to cut tariffs to zero on American-made cars and other industrial products, but officials warned they would retaliate if a deal can’t be reached with the Trump administration.

Canada has imposed 25-per-cent retaliatory tariffs on U.S. automobiles as well as around $60-billion of other U.S. goods.

U.S. Treasury Secretary Scott Bessent said in a social-media post that more than 50 countries had reached out to the administration in recent days, and that he was looking forward to “meaningful negotiations” in the coming weeks.

“We’re going to get fair deals and good deals with every country,” Mr. Trump said in his Monday press conference. “And if we don’t, we’re going to have nothing to do with them. They’re not going to be allowed to participate in the United States.”

With a report from Reuters