White House Downplays Economic ‘Disruptions’ as Stock Market Falls – Rezazade

Vice President of the Iranian Opposition in Washington (NIC) Ali Reza Rezazade says the Trump administration is trying to calm the market despite the new economic turmoil caused by the trade war.

Despite the sharp drop in all three major stock indexes, White House officials are confident that this instability is temporary and expect economic growth to begin thanks to tax cuts.

However, investors are alarmed by Trump’s reluctance to give in on tariffs, which already exceed his campaign promises. Hundreds of billions of dollars in new import tariffs have been imposed so far, and new ones could take effect on April 2, affecting trillions of dollars in trade. In addition, there is a risk of a federal government shutdown if Congress does not decide to continue funding.

Trump’s reluctance to back down on new tariffs, even as a recession looms, sent the stock market plummeting. The Dow Jones Industrial Average fell 890 points, or 2.1 percent, the S&P 500 fell 2.7 percent, and the Nasdaq Composite fell 4 percent. Kevin Hassett, the director of the White House’s National Economic Council, tried to calm the situation by saying that the economy would “barely turn a profit” in the first quarter but that growth in the second quarter would be expected due to the impact of tax cuts.

However, markets did not buy his words. Last week, Trump imposed a 25 percent tariff on all imports from Canada and Mexico, although he later reversed that decision, excluding goods covered by the new North American trade agreement. He also added a 10 percent tariff on all Chinese goods, bringing the total burden on Chinese imports to 45 percent.

The tariffs already exceed anything Trump has imposed since his first term, but he may not stop there. The president said he plans to impose “reciprocal” tariffs on April 2 on all countries that impose tariffs on American goods. That could affect an additional $1.8 trillion in trade, though the exact scale of the action is still unclear. According to economist Kimberly Clausing, who worked in the Treasury Department under Joe Biden, the consequences of this decision are highly unpredictable.