Stocks fall as Trump warns of US economy trade war ‘transition’ | Global News Avenue

On Monday, a sell-off in the U.S. stock market promoted steam, which caused a rise in the cost of the trade war on the world’s largest economy.

The S&P 500, which tracks the largest U.S. companies, fell about 2% in early trade, while Dow Jones fell 0.9% and Nasdaq stock fell more than 3.5%.

The waterfall comes after President Donald Trump’s questions about the recession or price increase faced by the U.S. economy due to tariff actions, and is warned rather than a “transition period”.

But Commerce Secretary Howard Lutnick insists there is no contraction in the U.S., although he acknowledges that prices for certain commodities may rise.

Investors worry about tariffs – This is the tax on goods entering the country – Will lead to higher prices, ultimately leading to growth in the world’s largest economy.

“I think there is no doubt that Trump’s tariff levels on this will have to cause inflation,” Killik & Co investment manager Rachel Winter told Plan Today.

Economist Mohamed El-Erian said investors were optimistic about Trump’s plans to lower and lower taxes while underestimating the possibility of a trade war.

He said the recent decline in stock markets that began last week reflects the adjustments to these bets.

“This is a complete change in market expectations,” he said, noting that investors are also responding to signs that businesses and households are starting to stop spending amid uncertainty, which could hurt economic growth.

Tesla shares fell about 8% on Monday, while technology stocks Nvidia and Meta both fell more than 4%.

Trump interviewed Fox News in an interview Sunday, but recorded on Thursday, he seemed to acknowledge these concerns, answering a question about whether the U.S. is facing a recession: “I hate to predict something like this. There was a transition period because there was a big thing we were doing. We brought wealth back to the U.S.. It was a big thing. It was a big thing.”

He added: “It takes a little time, but I think it should be great for us.”

The U.S. president accused China, Mexico and Canada of not enough actions to end illegal drugs and immigration into the U.S. The three countries rejected the allegations.

Last week, he imposed a new 25% tariff on imports from Mexico and Canada, but then exempted many goods only two days later.

Trump will also double the blanket tariffs from Chinese goods to 20%.

The United States is now facing retaliation, including a new selling tax rate from China, targeting U.S. agricultural products that will take effect on Monday.

They mean U.S. exports, including chicken, beef, pork, wheat and soy, face new tariffs of 10% to 15%.

Ontario Prime Minister Doug Ford, who leads Canada’s most populous province, also said he would retaliate against the United States with a 25% energy export surcharge in retaliation against the tariffs.

He warned that if Trump escalated, “I wouldn’t hesitate to turn off the power completely.”

“Foreign goods may become more expensive,” Commerce Secretary Howard Lutnick admitted in a speech on NBC on Sunday.

“But American goods will become cheaper,” he said.

But when asked if the U.S. economy can face a recession, he added: “It is definitely not… there will be no recession in the U.S..”

Frank Lavin, a former U.S. Department of Commerce official, told the BBC that he believes the trade war is unlikely to escalate and get out of control.

But while tariffs will eventually “somewhat fade out”, they will still be “an additional burden on the U.S. economy.”

Han Shen Lin, China state director of consulting firm Asia Group, told the BBC’s plan today: “You see a lot of Tat’s tits between the two parties to prove that neither party will easily back down.

“That is, China has realized that it may not be able to export to GDP growth in the past, so it is now focusing more on the domestic economy.”