Donald Trump has insisted his tariff war is 'doing really well' despite mounting recession fears and a survey showing US consumer expectations for price growth have soared to a four-decade high. The University of Michigan survey recorded a year-ahead inflation expectation reading of 6.7%, the highest since 1981, while consumer sentiment dropped 11% to 50.8, its lowest since the Covid-19 pandemic.
Beijing retaliated on Friday by raising Chinese tariffs on US products to 125%, accusing Trump of 'unilateral bullying and coercion'. The Chinese finance ministry stated that further US tariff increases 'would no longer have any economic significance' and would be 'a joke in the history of world economics'. Despite this, the White House maintains that dozens of countries are scrambling to make deals, with press secretary Karoline Leavitt claiming 'the phones have been ringing off the hook'.
Financial markets experienced extraordinary volatility, with the S&P 500 dropping 12% in four sessions before surging back almost 10% in a single day after Trump announced a 90-day pause on higher tariffs for most countries, except China which faces a 145% tariff. The S&P 500 finished the week up 5.7%, its biggest weekly gain since November 2023. However, US government bonds suffered their largest weekly loss since 2019, and the dollar fell against major currencies.
Wall Street leaders expressed deep concern. BlackRock CEO Larry Fink said the US is 'very close, if not in, a recession now', warning that the tariff pause means 'longer, more elevated uncertainty'. JPMorgan Chase CEO Jamie Dimon said the economy faces 'considerable turbulence'. Senior Democrats have called for an investigation into alleged insider trading after Trump posted 'A GREAT TIME TO BUY!!!' on social media hours before announcing the tariff climbdown.
Trump wrote on Truth Social: 'We are doing really well on our TARIFF POLICY. Very exciting for America, and the World!!! It is moving along quickly.' Leavitt claimed 'there is great optimism in this economy' and urged trust in Trump's 'proven economic formula'. Official data shows US inflation climbed at an annual rate of 2.4% last month.
