‘We are the sumo wrestler of the world’: White House adamant on Trump tariffs as markets crash

Washington DC: Financial markets across the globe suffered sharp losses on Thursday following a sweeping set of tariffs announced by US President Donald Trump, intensifying fears of a full-blown trade war.

The S&P 500 dropped 4.8 percent, marking its steepest single-day fall since 2020. The tech-focused Nasdaq tumbled 6.0 percent, while the Dow Jones Industrial Average declined by 4.0 percent. Asian and European markets followed suit, with Japan’s Nikkei 225 down 1.8 percent in early Friday trade.

The US tariffs include a blanket 10 percent duty on all imports, with significantly higher rates on goods from key trade partners. Imports from China now face an additional 34 percent tariff, raising the total new rate to 54 percent. The European Union and Japan are also hit with new rates of 20 and 24 percent, respectively. Separate 25 percent tariffs on all foreign-manufactured cars also took effect.

Canada responded by imposing reciprocal tariffs on US goods, and auto manufacturer Stellantis halted production at several Canadian and Mexican facilities.

Despite global market turmoil and diplomatic backlash, President Trump dismissed the sell-off. "The patient was very sick. The economy had a lot of problems," Trump said. "It went through an operation. It's going to be a booming economy."

Vice President JD Vance acknowledged the market volatility but remained optimistic, stating, “I frankly thought in some ways it could be worse in the markets, because this is a big transition.”

Commerce Secretary Howard Lutnick defended the president's strategy, urging patience. “Let Donald Trump run the global economy. He knows what he’s doing,” he told CNN.

International reactions were swift. China demanded the tariffs be revoked and pledged countermeasures. The European Union warned of retaliation targeting US tech firms, with French President Emmanuel Macron calling for a freeze on investments in the US until the tariff policy is clarified.

IMF Managing Director Kristalina Georgieva labelled the measures “a significant risk to the global outlook,” while WTO chief Ngozi Okonjo-Iweala warned of a potential 1 percent contraction in global merchandise trade volumes this year.

Republican Senator Mitch McConnell broke ranks with the administration, criticising the tariffs as “bad policy” and calling for stronger cooperation with allies.

While some countries continue to pursue dialogue, White House officials insisted the tariffs are not open for negotiation. “You can’t really fight with the United States,” said Lutnick. “You’re going to lose. We are the sumo wrestler of this world.”

The situation remains volatile as governments and markets brace for the potential long-term effects of the US’s assertive trade stance.

(With AFP inputs)