Trump insists he won’t back down from global trade war as markets slump

Donald Trump doubled down on his decision to launch a global trade war, declaring that he would “never” back off from sweeping tariffs on US trading partners.

The US president’s announced action sent shock waves around the world this week, prompting fierce threats of retaliation and sharp sell-offs in stock markets.

In an all-caps message on his Truth Social social media platform, Trump sought to convey his defiance in the wake of news that Beijing is preparing to hit back with 34% tariffs of its own.

“TO THE MANY INVESTORS COMING INTO THE UNITED STATES AND INVESTING MASSIVE AMOUNTS OF MONEY, MY POLICIES WILL NEVER CHANGE,” he claimed. “THIS IS A GREAT TIME TO GET RICH, RICHER THAN EVER BEFORE!!!”

Within hours, however, the president was indicating that he might be prepared to change course. “Just had a very productive call with To Lam, General Secretary of the Communist Party of Vietnam, who told me that Vietnam wants to cut their Tariffs down to ZERO if they are able to make an agreement with the U.S.,” Trump wrote on Truth Social, adding that he looked forward to a meeting “in the near future”.

The comments came as markets tumbled for the second straight day after Trump’s move to bring in tariffs on scores of countries. He claims the policy – a blanket 10% tariff from Saturday, with higher rates for specific markets from next week – will bring US manufacturing jobs back to the US and raise trillions of dollars for the federal government. Many economists have cautioned it will trigger economic chaos, and likely raise prices.

The International Monetary Fund (IMF) has warned that the move may well knock the global economy. Kristalina Georgieva, its managing director, , said: “We are still assessing the macroeconomic implications of the announced tariff measures, but they clearly represent a significant risk to the global outlook at a time of sluggish growth.”

Shortly before Wall Street opened on Friday, Trump claimed China had “panicked” by announcing new retaliatory tariffs on US imports. “CHINA PLAYED IT WRONG, THEY PANICKED – THE ONE THING THEY CANNOT AFFORD TO DO!” he wrote on Truth Social.

China’s industry associations have unanimously condemned the tariffs. The country’s National Textile and Apparel Council said it “supported the government’s forceful measures” and that the US had “damaged the resilience of the global textile industry’s supply chain”.

The S&P 500 fell 4.4% in early trading, exacerbating a decline that began in February. The index, which tracks 500 of the leading US companies, is now down almost 14% from its peak.

Shares in the US bank sector had fallen nearly 6% on Friday, reflecting fears that the trade war could trigger a recession. It could also be an indicator that investors are expecting faster interest rate cuts by the US Federal Reserve, in order to instigate growth.

Crude oil prices also plunged by 8% on Friday, heading for their lowest point since the middle of the pandemic in 2021.

The US secretary of state, Marco Rubio, told reporters that the markets “will adjust” to the sweeping tariffs imposed by Trump. “The markets are reacting to a dramatic change in the global order in terms of trade … As long as they know what the rules are going to be moving forward … the markets will adjust.”

Many Democrats have expressed frustration with the early impacts of the tariffs on the US economy. JB Pritzker, the governor of Illinois, wrote on X: “The biggest tax hike in American history. Donald Trump’s tariffs are throwing the economy into the tank.”

California senator Alex Padilla wrote: “I’m not enraged by the stock market crashing because I’m sympathetic towards traders on Wall Street. I’m mad because this hurts the pensions and retirement savings of so many Americans. And Trump couldn’t care less.”