US President Donald Trump remained defiant as global financial markets plunged into turmoil a day after he announced sweeping tariffs. The escalating trade war knocked trillions of dollars off the value of the world’s biggest companies and heightened fears of a US recession.
The S&P 500 dropped 4.8 percent in its biggest loss since 2020. The tech-rich Nasdaq plummeted 6.0 percent and the Dow Jones 4.0 percent.
Tokyo’s key Nikkei 225 index was down 1.8 percent in early trade Friday.
As world leaders reacted to the US president’s “liberation day” tariff policies demolishing the international trading order, about $2.5tn was wiped off Wall Street and share prices in other financial centers across the globe.
Trump on turmoil after tariffs: The economy went through an operation
Trump dismissed the turmoil, insisting to reporters as he left for a weekend at his Florida golf resort that stocks will “boom.” He said he wants to make the US free from reliance on foreign manufacturers, in a massive economic reshaping that he likened to a medical procedure.
“It’s what is expected,” the president said of the market reaction. “The patient was very sick. The economy had a lot of problems…It went through an operation. It’s going to be a booming economy. It’s going to be amazing.”
Vice President JD Vance, in an interview with Newsmax, also played down the market turbulence. “I frankly thought in some ways it could be worse in the markets, because this is a big transition,” Vance said.
“But we’re going to have a booming stock market for a long time, because we are reinvesting in the United States of America,” he added.
The vice-president stressed the government wants Wall Street to do well, “but we care the most about are American workers and about American small businesses. And they’re the ones who are really going to benefit from these policies.”
Vance also noted the tariffs imposed “could have gone a lot higher”, but Trump is trying to “send a message that we’re going to be a little kind”.
Amid howls of protest abroad and from even some of Trump’s Republicans, who fear price rises at home, Commerce Secretary Howard Lutnick urged patience. “Let Donald Trump run the global economy. He knows what he’s doing,” Lutnick said on CNN.
World leaders round on Trump
Experts said Trump’s sweeping border taxes of between 10 percent and 50 percent on the US’s traditional allies and enemies alike had dramatically added to the risk of a steep global downturn and a recession in the world’s biggest economy.
The immediate impact of the tariff announcements was driven home when Stellantis, which produces Chrysler and Dodge vehicles, paused production at plants in Mexico and Canada. Some 900 US-based workers were temporarily laid off.
World leaders from Brussels to Beijing rounded on Trump. China condemned “unilateral bullying” practices and the EU said it was drawing up countermeasures.
