Trump doubles down as US markets slide
White House press secretary, Karoline Leavitt, has encouraged Americans to ignore the stock market and “bet on the president”.
White House press secretary, Karoline Leavitt, has encouraged Americans to ignore the stock market and “bet on the president”, as Donald Trump escalated his trade war today by announcing he will double tariffs on Canadian steel and aluminium from 25 per cent to 50 per cent.
He is doubling down on his aggressive trade policies, despite a slide on the markets over the potential impact on the American economy. The S&P 500, which tracks the biggest US companies, fell by 2.7% yesterday - its worst day of the year - and the slide has continued today.
Leavitt defended Trump’s vision for the USA to be a “manufacturing superpower”, insisting previous US administrations "stuck a knife" in the back of the American worker and "Canada has been ripping off the US for decades".
The US president’s decision to double tariffs against Canada was a response to Ontario premier, Doug Ford, announcing a 25 per cent surcharge on electricity it sends to northern US states.
The timing is perhaps also Trump’s way of sending a message to Canada’s incoming PM, Mark Carney, that he isn’t remotely threatened by the bold pledges made in his victory speech to respond mercilessly to a Trump-initiated tariff war “until America shows us respect”.
A day after Carney insisted “Canada never, ever, will be part of America in any way, shape or form”, Trump also repeated his 51st state jibe, posting on social media that Canadians could avoid any tariffs by joining the US.
A fresh Canadian retaliation is already pending. Ford vowed to be “relentless” in responding to any new US tariffs, threatening to entirely cut off electricity supplies to US states such as New York, Minnesota and Michigan. If both countries slide into a recession as a result, "it will be called the Trump recession”, he added.
Pierre Poilievre, of the Conservative Party of Canada, has called on the Liberal government to respond proportionately with 50 percent tariffs on all steel and aluminium imported from the US. "Do not mistake our kindness for weakness”, he warned.
The Trump administration is playing down current market turbulence as a temporary disturbance. Asked this evening by reporters about the possibility of a US recession, Leavitt responded vaguely: “The numbers that we see today, saw yesterday and will see tomorrow are a snapshot of a moment.”
She echoed Trump who, when asked over the weekend whether his economic policies could spark a US recession, responded: "I hate to predict things like that. There is a period of transition because what we're doing is very big. We're bringing wealth back to America."
This comes as Goldman Sachs downgraded America’s growth forecasts today for the year to 1.7 per cent, from a previous forecast of 2.4 per cent. And the latest real-time analysis by the Atlanta branch of the US Federal Reserve predicts a falling US economy in the first three months of the year.
It is not just tariffs in and of themselves that are unsettling markets, but the sheer uncertainty of Trump’s chaotic trade policy, which changes by the day.
Yet the US president appears to be less risk averse than during his first stint in the Oval Office. Before, he would often row back on plans after seeing a stock market fall. Now, he is doubling down.
Caitlin Allen
Deputy Editor
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