Market Armageddon: Trump vs. the World in the Name of Economic Boom

President Donald Trump and his economic team dismissed investor concerns about inflation and recession without expressing regret for the market turmoil caused by sweeping global tariffs, confidently insisting that an economic boom is on the horizon.

Speaking aboard Air Force One on Sunday, Trump took a defiant tone, repeatedly defending the series of tariffs announced last week. He also drew a red line, stating he would not make deals to reduce the highest tariffs unless they eliminate the U.S. trade deficit with the given country.

“We’re going to be a rich nation again – richer than ever before,” Trump told reporters Sunday. “We have all the advantages. Forget the markets for a second – we have all the advantages.”

“I don’t want anything to crash, but sometimes you have to take medicine to fix something,” said Trump, as U.S. stock futures fell and the yen strengthened – a sign of deepening trade tensions.

Asian stocks plunged as much as 7.9% – the biggest intraday drop in over 16 years. Shares in Hong Kong and China dropped sharply, with the Hang Seng sinking over 10%. Australia’s trade-dependent benchmark index saw its largest fall since the Covid pandemic began, while declines in Tokyo triggered circuit breakers. Taiwan’s stock index, open for the first time since Trump’s global tariff announcement last week, registered the largest drop in its history.

Trump’s comments echoed those of his top economic advisers, who made media rounds on Sunday defending the president’s plan without a hint of doubt from within the administration.

After major global market crashes, Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and others confirmed that Trump would proceed with his tariff policy regardless of market reactions.

“Tariffs are coming,” Lutnick said on CBS’s Face the Nation, adding that Trump “announced them and he wasn’t kidding.”

“I don’t see a reason to price in a recession,” Bessent said on NBC’s Meet the Press with Kristen Welker, despite JPMorgan economists forecasting on Friday that the U.S. would enter a recession this year.

Markets braced for another rough week, with U.S. stock futures crashing Sunday night. S&P 500 contracts fell 4.4% at 8 p.m. in New York, after the index lost 10% over two days.

While Trump posted videos of himself golfing in Florida, White House trade advisor Peter Navarro said investors should believe in Trump’s resolve, even if tariff levels change through negotiations. Bessent said over 50 countries had contacted the administration, but any potential negotiations would take time.

“They’ve been behaving badly for a long time. This isn’t something you can negotiate in days or weeks,” said Bessent. First, the U.S. would have to assess whether other countries’ offers are “credible.”

“We’ll have to see what the path forward is. Because after 20, 30, 40, 50 years of bad behavior, you can’t just wipe it all away with a magic wand.”

Trump singled out China and the European Union in his remarks, saying world leaders are calling him trying to strike deals. But Trump – who uses a crude formula applying higher tariffs to countries with larger exports to the U.S. – said he won’t sign any deals unless they eliminate America’s trade deficit with that country. This will be nearly impossible with several low-wage countries that received higher tariffs but are sources of affordable goods for the U.S. market.

“To me, the deficit is a loss. We’ll have surpluses or at worst break even,” Trump said, adding, “You know, I was elected because of this. This was one of the main reasons I won.”

In the two days following the April 2 tariff announcement, markets lost $5.4 trillion in value, and the S&P 500 dropped to its lowest level in 11 months.

Bessent, a former hedge fund manager who made his fortune with his own Key Square Group and Soros Fund Management, downplayed the market crash, calling markets “organic creatures.”

“The market constantly underestimates Donald Trump,” he said.

Navarro predicted the current drop in stocks would eventually become a powerful rally. “We’ll find the bottom of this market quickly,” he said on Fox News’ Sunday Morning Futures. “We’ll hit 50,000 on the Dow effortlessly by the end of this term.”

“This is not what we voted for”

Outside the Trump administration, others were far less optimistic.

“I firmly believe that the April 9 tariffs against the entire world – at a rate many times higher than what’s charged to us – are a mistake,” wrote Pershing Square founder Bill Ackman, who supported Trump in the 2024 election, on X.

“The president is losing the trust of business leaders across the globe. The consequences for our country and for millions of our citizens who supported the president – especially low-income consumers already under immense economic pressure – will be extremely negative,” Ackman added in another post. “This is not what we voted for.”

Former Treasury Secretary Larry Summers said last week’s crash was the fourth-largest two-day market move since World War II – following the 1987 crash, the 2008 financial crisis, and the Covid pandemic in 2020.

“A drop of this magnitude suggests there are likely problems ahead, and people should be very cautious,” said Summers, a Harvard professor and paid contributor to Bloomberg TV, in a post on X.

The Trump team’s remarks came a day after an additional 10% tariff on all U.S. imported goods took effect Saturday. Additional special tariffs of up to 50% are set to kick in Wednesday for imports from about 60 countries.

The announced tariffs will bring U.S. import taxes to their highest level in over a century.

Consumer prices

Kevin Hassett, head of the White House National Economic Council, acknowledged that prices for American consumers “may go up a bit,” but suggested that concerns from economists, the Federal Reserve, and some lawmakers are overblown.

Speaking on ABC’s This Week, Hassett also said Americans will ultimately benefit from tax relief and spending cuts Trump wants to pass through Congress.

Both Bessent and Hassett downplayed fears that the series of tariffs would cause inflation, openly contradicting the Federal Reserve and Wall Street economists.

Federal Reserve Chair Jerome Powell said Friday that “it’s becoming clear the tariff increases will be significantly larger than expected,” likely resulting in higher inflation and slower growth.

Unified statements from Trump’s top economic advisers on Sunday cemented the growing view that the president intends to make tariffs a permanent fixture and sees any economic pain as a worthwhile cost for the long-term transformation of the U.S. economy.

Agenda at risk

Trump said he is taking steps to redraw the global economy in America’s favor, arguing that tariffs would trigger a wave of investment as companies build new factories in the U.S., bringing jobs and wealth back home.

His main goal is the U.S. trade deficit in goods, which surpassed $1 trillion last year. According to Trump and his team, eliminating that deficit is a matter of national security and will “make America rich again.”

Marc Short, who served as legislative affairs director in Trump’s first term and later as chief of staff to Vice President Mike Pence, said markets had assumed Trump was using tariffs as a bargaining chip as he did during his first administration, but this time he’s receiving different advice.

Short, who like Pence does not support the tariffs, said in a Saturday interview he expects an eventual “retreat” by the administration in response to the markets. “But I don’t think it’ll be soon,” he said. “And when it does happen, it will be framed as a victory.”

Short also added that a potential recession would put other parts of Trump’s agenda at risk, including talks in Congress to extend tax cuts from his first term if Republicans face pressure from voters over rising costs.