Washington
CNN
—
President Donald Trump isn’t scheduled to appear in public on Tuesday until after markets close. But by midday, his words had already spooked investors. After threatening a new round of tariffs in a social media post, markets sank again.
As he pursues a hardline trade agenda and announces plans for new tariffs on a near-daily basis, Trump is sending jitters through the economy and drawing blowback even from some of his allies, who see their political or financial fortunes in the balance.
Some Republicans, along with business executives and economists, have warned that Trump’s harsh approach toward the United States’ largest trading partners could risk major damage to what had been an improving economy.
“This market is just blatantly sick and tired of the back-and-forth on trade policy. It feels as though the administration continues to move the goal posts,” Art Hogan, chief market strategist at B. Riley Wealth Management, told CNN in a phone interview Tuesday. “With that much uncertainty, it’s impossible for investors to have any confidence.”
When the president comes face-to-face with some of America’s top business leaders late Tuesday in Washington as he addresses the Business Roundtable, he will have another chance to explain his market-roiling trade policies. It’s an open question whether any CEOs will aggressively press the president on tariffs, as they have in private conversations.
It’s not clear how carefully Trump’s combative approach to tariffs has been planned out. His Tuesday threat to ramp up duties on steel and aluminum on Canada, which were set to go into effect Wednesday, was not drawn up into formal paperwork ahead of time, officials said.
“This is absolute chaos, created by one person, and that’s Donald Trump,” Doug Ford, the Ontario premier, told CNN on Tuesday. “This has to stop. Let’s sit around the table and negotiate a new deal, even though he created the deal in the first place.”
Since Trump entered office 50 days ago, there have been few weekday afternoons when he hasn’t invited reporters into the West Wing to hold forth on camera. Monday was one of them. As stock markets tumbled, Trump remained behind closed doors, hosting tech executives and swearing in his new Secret Service chief all without cameras rolling. It was Trump’s own comments a day earlier, refusing to rule out a recession, that caused markets to sink, rendering his silence Monday even more notable.
For a president who boasts of one record-setting moment after another, he has taken an unusually equivocal tone on the slowing economy. Shortly after taking office, he talked about “short-term pain.” In his speech to Congress last week, he acknowledged the prospect of “a little disturbance” in the economy, adding: “It won’t be much.”
But Trump has yet to seize the bully pulpit in the way he has on other issues, fueling uncertainty that markets have rejected day after day.
The president did, however, seek to offer reassurance to one American company whose stocks fell 15% on Monday, raising losses since the beginning of the year to 45%.
“I’m going to buy a brand new Tesla tomorrow morning as a show of confidence and support for Elon Musk, a truly great American,” Trump posted on social media.
Trump’s aides have been quick to downplay recession fears, suggesting instead that the new tariffs will cause momentary “disruption” as global trade is realigned toward the United States.
“Since President Trump was elected, industry leaders have responded to President Trump’s America First economic agenda of tariffs, deregulation, and the unleashing of American energy with trillions in investment commitments that will create thousands of new jobs,” Kush Desai, a White House spokesperson, said in a statement after markets closed Monday. “President Trump delivered historic job, wage, and investment growth in his first term, and is set to do so again in his second term.”
But for a businessman who has long seen a rising stock market as a critical metric of economic success, the steep declines on Wall Street have cast doubt on Trump’s repeated insistence that he isn’t paying attention.
“You can’t really watch the stock market,” Trump told Fox Business in an interview that aired over the weekend in which his comments declining to rule out a recession touched off a fresh wave of anxiety and led to the biggest market decline of the year.
That admonition from Trump, which even many of his allies and advisers privately concede they don’t fully believe, is at odds with what he said throughout the campaign and during his transition back to power.
“I don’t want to say this, it’s too braggadocios, but we’ll say it anyway — the Trump effect,” he told a crowded rally on the eve of his inauguration, basking in applause from his supporters. “Since the election, the stock market has surged.”
Today, the Trump effect is seen in a far different light. The New York Post, one of his favorite old tabloids that he reads religiously, blared a warning on Tuesday’s edition: “Buckle Up! Markets plunge as Trump takes the economy on a wild ride.”
As Trump remained uncharacteristically out of public view on Monday, a question began emerging among some Republican donors, investors and business leaders who scrambled to explain the sudden economic whiplash: Is Trump working to engineer a recession — or not actively building a narrative against it — to force the Federal Reserve into cutting interest rates?
In his second presidency, Trump has far fewer dissenting voices in his administration, particularly those who may offer a different economic view on tariffs.
“Tariffs are going to be the greatest thing we’ve ever done as a country,” Trump told reporters Sunday. “It’s going to make our country rich again.”
In Trump’s view, the disruption caused by his tariffs is a necessary step toward correcting decades of bad decisions on trade that hollowed out American manufacturing and led to core US industries being moved overseas.
His whipsaw tariffs have thrown foreign governments off balance, prompting their leaders to scramble to get Trump on the phone to plead for a reprieve.
The tariffs are also a necessary revenue driver that, in Trump’s plan, will be used to pay for new tax cuts he promised as a candidate, and an extension of the tax cuts he hopes to approve later this year.
Trump arrived in office having inherited strong a economy, with rising wages and consumer spending, low unemployment and inflation — albeit higher than consumers or the Federal Reserve would like — appearing to slow.
All presidents, at points in their terms, find themselves frustrated by the relative difficulty of directly improving the economy from the Oval Office. While they catch blame from the public, many of the factors that influence the economy Americans feel are out of their control.
For Trump, however, many of the most pressing economic concerns can be directly linked to his policies.
New tariffs have the potential to aggravate already high prices that Trump himself credited with helping him win. Mass government layoffs could push up unemployment, while also causing workers uncertain about their future to pull back on spending. And large-scale deportations could cause rising costs in industries dependent on migrant labor, including construction and health care.
All of the uncertainty could cause businesses to hold off on hiring and investing, helping push down growth forecasts.
For Trump, however, uncertainty appears part of the plan.
“They always say that. ‘We want clarity,’” he said in his Fox Business interview. “They have plenty of clarity.”
