Extract from ABC News
Donald Trump is under pressure as the tariff backlash mounts. (Carrington Clarke)
In short:
Tariff fears have caused US markets to fall even further on a volatile Monday, local time, following their worst week since the chaos of COVID.
But Donald Trump is digging in, promising "greatness will come" if Americans are "strong, courageous and patient".
What's next?
Some financial analysts say the chances of a recession in the US are continuing to increase further.
The losses have been worsening for financial markets worldwide as worries rise about whether US President Donald Trump's trade war will torpedo the global economy.
The S&P 500 index, tracking the US's 500 largest public companies, was down almost 4 per cent in early Monday trading. That's off the back of its worst week since COVID began crashing the global economy in March 2020.
The Dow Jones Industrial Average was down 1,343 points, or 3.5 per cent, shortly after opening, and the Nasdaq composite was 4.2 per cent lower.
Stocks later shot up again briefly as a rumour circulated on social media that Mr Trump was considering a 90-day pause of tariffs. The rumour was aired by business network CNBC, then dismissed by the White House as "fake news", sending stocks down again.
Mr Trump has remained defiant. "The United States has a chance to do something that should have been done DECADES AGO," he wrote on social media early Monday, local time.
"Don't be Weak! Don't be Stupid! Don't be a PANICAN (A new party based on Weak and Stupid people!). Be Strong, Courageous, and Patient, and GREATNESS will be the result!"
Mr Trump also threatened to impose an additional 50 per cent tariff on imports from China from Wednesday if China did not withdraw its new 34 per cent tariff on US goods.
Goldman Sachs issued a new forecast saying a recession has become more likely even if Mr Trump backtracks from his tariffs.
The financial firm now puts the odds of a US recession at 45 per cent. It said economic growth would slow dramatically "following a sharp tightening in financial conditions, foreign consumer boycotts, and a continued spike in policy uncertainty that is likely to depress capital spending by more than we had previously assumed".
Trump again spotlights beef with Australia
Investments have been hammered in Australia — where the week started with a wipeout of $110 billion from the share market — and around the world. Stocks in Hong Kong plunged 13.2 per cent for their worst day since 1997. A barrel of benchmark US crude oil briefly dropped below $US60 for the first time since 2021, hurt by worries that a global economy weakened by trade barriers will burn less fuel. Bitcoin sank below $78,000, down from its record above $100,000 set in January, after holding steadier than other markets last week.
It's alarming Wall Street not just because of the sharp losses it's taking, but because it suggests Mr Trump may not be moved by its pain. Many professional investors had long thought that a president who used to crow about records reached under his watch would pull back on policies if they sent the markets reeling.
On Sunday, Mr Trump told reporters aboard Air Force One that he does not want markets to fall. But he also said he wasn't concerned about a sell-off, saying "sometimes you have to take medicine to fix something".
Some investors are holding onto hope that Mr Trump may lower his tariffs after negotiating with other countries, and Mr Trump said Sunday that he's heard from leaders "dying to make a deal". A drop in tariffs relatively soon could help avoid a recession, but whether that can happen is still uncertain.
Mr Trump has given several reasons for his stiff tariffs, including to bring manufacturing jobs back to the US, which is a process that could take years. Mr Trump on Sunday said he wanted to bring down the numbers for how much more the US imports from other countries versus how much it sends to them.
"The recent tariffs will likely increase inflation and are causing many to consider a greater probability of a recession," JPMorgan CEO Jamie Dimon, one of Wall Street's most influential executives, wrote in his annual letter to shareholders on Monday. "Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth."
Mr Trump's tariffs are an attack on the globalisation that's remade the world's economy, which helped bring down prices for products on the shelves of US stores but also caused production jobs to leave for other countries.
In a stream of social media posts justifying his tariffs policy, Mr Trump again highlighted Australia's restrictions on American beef imports, sharing a clip of a Fox News interview with Wyoming Senator John Barrasso.
"Australia has sold $29 billion worth of beef in the United States and we haven't been able to sell one hamburger in Australia," Senator Barrasso says in the clip, in which he also mentions barriers in Thailand and Vietnam.
"You look at these numbers and the ranchers of Wyoming are saying, 'thank you Mr President, it is about time'."
Expectations for inflation are also swinging higher because of Mr Trump's tariffs.
"The idea that there's so much uncertainty going forward about how these tariffs are going to play out, that's what's really driving this plummet in the stock prices," said Rintaro Nishimura, an associate at the Washington-based consulting group The Asia Group.
Nathan Thooft, chief investment officer and senior portfolio manager at Manulife Investment Management, said more countries are likely to respond to the US with retaliatory tariffs. Given the large number of countries involved, "it will take a considerable amount of time in our view to work through the various negotiations that are likely to happen".
"Ultimately, our take is market uncertainly and volatility are likely to persist for some time," he said.
AP/ABC
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