Trump insists tariff war is ‘doing really well’ as recession fears mount

Donald Trump insisted his trade war with much of the world was “doing really well” despite mounting fears of recession and as Beijing hit back and again hiked tariffs on US exports to China.

As the US president said his aggressive tariffs strategy was “moving along quickly”, a closely watched economic survey revealed that US consumer expectations for price growth had soared to a four-decade high.

The White House maintains that the US economy is on the verge of a “golden age”, however, and that dozens of countries – now facing a US tariff of 10% after Trump shelved plans to impose higher rates until July – are scrambling to make deals.

“The phones have been ringing off the hook to make deals,” the press secretary, Karoline Leavitt, told reporters on Friday.

Beijing raised Chinese tariffs on US products to 125% on Friday – the latest salvo of its escalating trade dispute with Washington – and accused Trump of “unilateral bullying and coercion”.

“Even if the US continues to impose even higher tariffs, it would no longer have any economic significance, and would go down as a joke in the history of world economics,” the Chinese finance ministry said.

Few investors were laughing. US government bonds – typically seen as one of the world’s safest financial assets – continued to be sold off, and were on course for their biggest weekly loss since 2019. The dollar also fell against a basket of currencies, and was down against the euro and the pound.

Leading stock indices paused for breath on Friday after days of torrid trading. The FTSE 100 rose 0.6% in London. The S&P 500 increased 1.8% and the Dow Jones industrial average gained 1.6% in New York.

The S&P 500 finished an extraordinarily volatile week for markets up 5.7%, its biggest weekly gain since November 2023.

“We are doing really well on our TARIFF POLICY,” Trump wrote on his Truth Social platform. “Very exciting for America, and the World!!! It is moving along quickly. DJT”.

Some of Wall Street’s most influential figures were unconvinced.

“I think we’re very close, if not in, a recession now,” Larry Fink, CEO of the investment giant BlackRock, told CNBC. Far from providing certainty, the 90-day pause on higher US tariffs on much of the world “means longer, more elevated uncertainty”, he added.

Jamie Dimon, CEO of JPMorgan Chase, the US’s largest bank, said the world’s largest economy was facing “considerable turbulence” as a key measure of consumer confidence tumbled to its lowest level since the Covid-19 pandemic – and the second-lowest level on record.

US consumer sentiment has dropped 11% to 50.8 this month, ahead the pause announced by Trump earlier this week, according to a regularly survey compiled by the University of Michigan.

Expectations for inflation meanwhile surged, with respondents indicating they are bracing for prices to rise by 6.7% over the coming year – the survey’s highest year-ahead inflation expectation reading since 1981.

“There is great optimism in this economy,” Leavitt claimed at the White House briefing when asked about the survey. “Trust in President Trump. He knows what he’s doing. This is a proven economic formula.”

Trump won back the White House last November by pledging to rapidly bring down prices – something he has claimed, in recent weeks, is already happening. US inflation climbed at an annual rate of 2.4% last month, according to official data.

“Consumers have spiralled from anxious to petrified,” observed Samuel Tombs, chief US economist at Pantheon Macroeconomics. He added, however, that a bipartisan divide – with Democrats growing more pessimistic, while Republicans become more upbeat – suggests that people are allowing their political views to cloud their economic confidence.

The US’s top markets watchdog is facing demands from senior Democrats to launch an investigation into alleged insider trading and market manipulation after Trump declared on social media that it was “A GREAT TIME TO BUY!!!” hours before announcing Wednesday’s climbdown on tariffs.

Days of erratic policymaking constructed a rollercoaster week for markets, with the S&P 500 dropping 12% in just four sessions, before surging back almost 10% in a single day after the administration pulled back from imposing higher tariffs on most countries, except China, which is facing a 145% tariff on exports to the US.

In a letter to the US Securities and Exchange Commission (SEC), Senate Democrats including Elizabeth Warren and Chuck Schumer wrote: “It is unconscionable that as American families are concerned about their financial security during this economic crisis entirely manufactured by the President, insiders may have actively profited from the market volatility and potentially perpetrated financial fraud on the American public.”

Tesla meanwhile stopped taking orders in China for two models it previously imported from the US, as companies scramble to adapt to prohibitive tariffs imposed in Trump’s trade war.

The manufacturer, run by Trump’s close ally Elon Musk, removed “order now” buttons on its Chinese website for its Model S saloon and Model X sports utility vehicle.

Tesla did not give any indication of why it had made the changes but it came after the rapid escalation of the trade war between the US and China.

The border taxes make the goods trade between the two countries prohibitively expensive and mean cars imported from the US are now much less attractive in China than those produced locally.

In the UK, economists warned that stronger than expected growth of 0.5% in February is likely to prove short lived as the impact of Trump’s trade war is felt throughout the global economy.