On Friday, President Donald Trump responded to China’s move to retaliate against his tariffs, saying they “panicked” and made a mistake. He brushed off concerns about the stock market drops, saying the trade tensions were a chance to “get rich.”
“China played it wrong, they panicked — the one thing they cannot afford to do!” Trump posted on Truth Social, writing in his signature all-caps style.
This came as the stock markets continued to fall for the second day in a row, with billions of dollars lost from investments and retirement savings.
Trump, who introduced his tariffs earlier in the week, showed no regret. He posted, “My policies will never change.” He added, “This is a great time to get rich, richer than ever before.”
However, China hit back hard. Starting April 10, China will impose 34 percent tariffs on U.S. imports. They also said they would take the U.S. to the World Trade Organization and limit exports of rare earth materials, which are important for high-tech products like electronics and medical equipment.
So far, other major trading partners of the U.S. have stayed quiet, as they wait to see how the trade conflict develops and worry about the possibility of a recession.
The stock market continued to dive on Friday, with the S&P 500 heading for its worst week since the start of the pandemic in March 2020. The Nasdaq Composite dropped more than 20 percent from its record high in December, entering what’s known as a “bear market.”
Leah Fahy from Capital Economics said that China’s response was “aggressive” and makes a quick resolution to the trade war unlikely.
In a report to clients, investment giant JP Morgan raised the chances of a global recession this year, increasing the odds from 40 percent to 60 percent.
On Friday afternoon, Trump also criticized the chairman of the U.S. Federal Reserve, Jerome Powell, calling him “late” in cutting interest rates and accusing him of “playing politics.”
Powell did not directly respond to Trump, but in a speech in Virginia, he said the Fed had to act to deal with ongoing inflation. He warned, “While tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persistent.”
