President Donald Trump acknowledged on Thursday that the modifications to his tariff policies may pose challenges, but he emphasized that he made these changes because prior administrations had not addressed these issues.
During a Cabinet meeting, Trump defended his revised trade approach as a necessary adjustment, even if it leads to short-term difficulties. “The transition is tough, but the outcome will ultimately be beneficial,” he stated, according to a live stream.
Trump has not dismissed the possibility of extending the 90-day suspension of his “reciprocal” tariffs. He indicated that if negotiations with U.S. trading partners do not yield favorable results, tariffs will revert to higher levels post-pause.
In response to a question about extending the pause, he noted, “We’ll have to see what unfolds.”
Major U.S. stock market indices all ended the day lower, with the S&P 500 down by 3.46%, the Nasdaq dropping 4.31%, and the Dow decreasing by 2.50%.
Bitcoin (BTC) has retraced some of the gains it made on April 9 and is currently trading at $79,800. It was a tough day overall for investors across various sectors.
Economic Conditions Resembling COVID-19
These comments come amid increasing economic concerns among U.S. monetary policymakers. Austan Goolsbee, President of the Chicago Federal Reserve Bank, expressed worries about a return to economic conditions reminiscent of the COVID-19 pandemic.
He cited a decline in confidence and rising anxiety within the district, warning that setbacks in public sentiment could pose greater risks to the economy.
A recent article provided additional insights into Trump’s trade strategy, indicating that he was willing to accept the potential for a mild recession to circumvent a more severe economic downturn.
However, in light of market turbulence and a sharp increase in Treasury yields, Trump shifted his stance on certain tariffs.
This decision, influenced by falling bond markets and guidance from National Economic Council Director Kevin Hassett, contributed to a market rebound on April 9, with the S&P 500 achieving its most significant single-day increase since 2008.
Treasury Secretary Scott Bessent apparently played a crucial role in facilitating the policy change.