China says it will “fight to the end” as it retaliates against US import tariffs, which rose to over 100% on Wednesday in response to China’s decision to match the “reciprocal” duties Trump announced last week. “If China does not withdraw its 34% increase above their already long term trading abuses by tomorrow, April 8th, 2025, the United States will impose ADDITIONAL Tariffs on China of 50%, effective April 9th,” Trump wrote on Truth Social. “Additionally, all talks with China concerning their requested meetings with us will be terminated!”
Reducing tariffs to 0% may not be enough for the Trump administration. White House trade advisor Peter Navarro on Monday said Vietnam’s 0% tariff offer will not suffice: “It’s the nontariff cheating that matters.” Trump also rejected the European Union’s offer of “zero-for-zero” tariffs with the US for industrial goods. Is that low enough for a deal? “No, it’s not,” Trump said of European Commission President Ursula von der Leyen’s offer. “They’re screwing us on trade,” the President said.
The spike in uncertainty unleashed by the tariff war is probably here to stay, writes Jason Furman, a professor at Harvard University and former chair of the White House Council of Economic Advisers in the Obama administration: “Even if Trump backs down from his most extreme proposal he will have succeeded in shifting the debate on tariffs and in building uncertainty, which itself can act like a tariff. It will be hard to put the evil genie back in its bottle. The best option would be for Congress to take back the power to set tariffs — which would at least be more predictable than leaving them to the whims of one person.”
Stocks briefly shot up on Monday on a rumor that the Trump administration would impose a 90-day pause on tariffs, only to quickly learn that it was fake news. But the idea suggested what it might take for the market to stabilize if not rebound, if only temporarily. “Only a change, even if a modest one, in US tariff/trade policy will stabilize equity prices,” DataTrek’s Nicholas Colas wrote on Monday. “Until there is an explicit catalyst to show markets the worst-case scenario (last Wednesday’s announcement) is off the table, stocks will continue to be volatile (at best) or decline (at worst).”
US Small Business Optimism Index declines to 5-month low in March. “The implementation of new policy priorities has heightened the level of uncertainty among small business owners over the past few months,” says NFIB Chief Economist Bill Dunkelberg. “Small business owners have scaled back expectations on sales growth as they better understand how these rearrangements might impact them.”
