Trump Defends Trade War Amid Recession Fears and Escalating Tariffs with China

 Washington, April 12, 2025 - U.S. President Donald Trump asserted that his trade war with much of the world is “doing really well” despite growing concerns of a recession and a retaliatory tariff hike by China, which raised duties on U.S. exports to 125%. The escalation marks the latest chapter in an intensifying trade dispute with Washington.

Trump, describing his aggressive tariffs strategy as “moving along quickly,” spoke as a closely watched economic survey indicated that U.S. consumer expectations for price growth have reached a four-decade high. The White House, however, maintains that the U.S. economy is on the cusp of a “golden age,” with dozens of countries—now subject to a 10% U.S. tariff following Trump’s decision to delay higher rates until July—eager to negotiate deals. White House Press Secretary Karoline Leavitt told reporters on Friday, “The phones have been ringing off the hook to make deals.”

China’s finance ministry hit back, accusing Trump of “unilateral bullying and coercion” and stating, “Even if the US continues to impose even higher tariffs, it would no longer have any economic significance, and would go down as a joke in the history of world economics.”

The financial markets reflected unease, with U.S. government bonds—considered among the world’s safest assets—experiencing their largest weekly decline since 2019. The dollar weakened against a basket of currencies, including the euro and pound. Major stock indices paused after a turbulent week, with the FTSE 100 rising 0.6% in London, the S&P 500 gaining 1.8%, and the Dow Jones Industrial Average increasing 1.6% in New York. The S&P 500 closed the week up 5.7%, its strongest performance since November 2023.

Trump took to his Truth Social platform to declare, “We are doing really well on our TARIFF POLICY. Very exciting for America, and the World!!! It is moving along quickly. DJT.”

However, prominent Wall Street figures expressed skepticism. Larry Fink, CEO of BlackRock, told CNBC, “I think we’re very close, if not in, a recession now.” He added that the 90-day pause on higher tariffs “means longer, more elevated uncertainty.” Similarly, Jamie Dimon, CEO of JPMorgan Chase, noted that the world’s largest economy faces “considerable turbulence” as consumer confidence plummeted to its lowest level since the COVID-19 pandemic, hitting 50.8 this month—a 11% drop per a University of Michigan survey. Inflation expectations surged, with consumers anticipating a 6.7% price increase over the next year, the highest since 1981.

Leavitt countered concerns during a White House briefing, asserting, “There is great optimism in this economy. Trust in President Trump. He knows what he’s doing. This is a proven economic formula.” Trump, who regained the White House in November by promising to lower prices, recently claimed this is already underway, with U.S. inflation at 2.4% annually last month according to official data.

Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics, observed, “Consumers have spiralled from anxious to petrified.” He suggested a partisan divide, with Democrats growing more pessimistic and Republicans more optimistic, may be influencing economic confidence.

The U.S. Securities and Exchange Commission (SEC) faces calls from senior Democrats, including Senators Elizabeth Warren and Chuck Schumer, to investigate alleged insider trading and market manipulation. This follows Trump’s social media post declaring, “A GREAT TIME TO BUY!!!” hours before announcing a tariff rollback on Wednesday. The S&P 500 dropped 12% over four days before surging nearly 10% in one day after the policy shift, excluding China, which now faces a 145% tariff on exports to the U.S.

In a letter to the SEC, the senators wrote, “It is unconscionable that as American families are concerned about their financial security during this economic crisis entirely manufactured by the President, insiders may have actively profited from the market volatility and potentially perpetrated financial fraud on the American public.”

Meanwhile, Tesla, led by Trump ally Elon Musk, halted orders in China for its Model S and Model X, previously imported from the U.S., amid prohibitive tariffs. The border taxes have rendered U.S.-imported cars less competitive compared to locally produced vehicles. In the UK, economists cautioned that a robust 0.5% growth in February is likely to be short-lived as Trump’s trade war impacts the global economy.