‘The slow moving Fed should cut rates,’ says Trump after tariffs cause domino effect

Last week, President Donald Trump announced major new taxes on imported goods, which has caused chaos in financial markets worldwide. The move was so disruptive that Trump is now pressuring the Federal Reserve to lower interest rates to help stabilize the economy. The stock market has dropped sharply, with the S&P 500 falling into what experts call a “bear market.”

The Guardian reports that while the U.S. markets are struggling, Asian markets had their worst day since the financial crisis of the late 1990s. Many people see Trump’s tariffs as an extreme and dangerous economic move, comparing them to “economic nuclear war.” The decision has sparked strong reactions from other countries and raised fears of a possible worldwide recession.

The new taxes on imports vary—some goods will have a 10% increase, while others, especially from certain countries, will face much higher rates. These tariffs have already led to countermeasures from other nations. China, which the Trump administration accuses of unfair trade practices, has stopped buying some U.S. farm products and has filed a legal complaint with the World Trade Organization (WTO). Canada, facing a 25% tax on cars and car parts, has also asked the WTO to step in and resolve the dispute.

World stocks fall as Trump tries to fix worsening situation

These responses suggest that the situation could escalate into a full trade war, which would hurt global business and weaken the economy. The economic damage is happening fast. Goldman Sachs now believes there is a 45% chance of a recession in the next year, pointing to tighter financial conditions, foreign countries refusing U.S. goods, and unpredictable government policies.

Jamie Dimon, the CEO of JPMorgan Chase, has warned that these tariffs could lead to higher prices, slower economic growth, and a decline in America’s influence worldwide. CNN reports that other banks and financial experts share these concerns, with many predicting a possible recession due to the instability caused by the tariffs. Some industries are already feeling the effects. Car manufacturers, hit hard by taxes on vehicles and parts, are slowing production and raising prices.

Farmers, who are still struggling from earlier tariffs, may need another government bailout to survive this new wave of trade restrictions. Making things worse, the Trump administration has sent mixed signals about its plans. While Trump himself insists the tariffs are necessary to fix unfair trade deals, his economic advisors have given unclear statements about whether the U.S. is open to negotiations. This confusion has made financial markets even more unstable, deepening the current crisis.

Elon Musk, the CEO of Tesla and a key advisor to Trump, has publicly disagreed with the policy, saying the U.S. and Europe should have no tariffs at all. These disagreements highlight the growing division over Trump’s trade strategy.

The global consequences of these tariffs are serious. The immediate pushback from China and Canada suggests that more countries could join the fight, risking international partnerships and economic security. The lack of clear communication from the White House about whether these tariffs are permanent or open to negotiation only makes the situation more dangerous. To prevent further damage, the conflict needs to be resolved quickly—but since Trump shows no signs of backing down, the crisis will probably get worse before it gets better.