President Trump sought to justify his controversial tariff policy during a press briefing in the Oval Office on Wednesday; however, his rhetorical inquiry regarding “stupid people” inadvertently highlighted his own shortcomings.
Following widespread ridicule, Trump announced a complete 90-day suspension of all “reciprocal” tariffs that had been implemented at midnight on April 10, with the exception of those imposed on China. This marked a significant reversal for a president who had previously touted his historically high tariff rates as a permanent fixture. While tariffs on China will remain in effect, they are set to increase from 104% to 125%, in response to Beijing’s announcement of new retaliatory tariffs earlier that day. In contrast, tariffs on other nations affected by reciprocal hikes will revert to the standard 10%, according to Trump.
Although traders may have welcomed Trump’s unexpected tariff shift, the overall economic outlook remains bleak. Economists caution that the damage has already been inflicted, and the likelihood of a recession in the U.S. and globally remains elevated.
Stock prices continue to languish below their levels prior to Trump’s introduction of the so-called “Liberation Day” tariffs last week. Experts suggest that ongoing market declines, existing tariffs, and the uncertainty surrounding U.S. trade policy could potentially lead the economy into a downturn.
Despite this retreat, Trump’s blanket 10% tariff, which took effect on Saturday, remains in place, along with 25% duties on imports of automobiles, steel, aluminum, and certain goods from Canada and Mexico. He has also committed to pursuing additional tariffs on pharmaceuticals, lumber, semiconductors, and copper.
Even after Trump’s partial concession, Goldman Sachs indicated that the probability of a U.S. recession remains uncertain. Similarly, JPMorgan has not altered its forecast, maintaining a 60% likelihood of recession.
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