President Donald Trump acknowledged Thursday that his tariff policy changes will be problematic but said he pursued them because no one else had taken the issues on.
Speaking at a Cabinet meeting, Trump defended the shift in trade strategy as a necessary correction, despite short-term pain. “The transition is difficult, but the end result will be positive,” he said, according to a CNBC livestream.
Trump is not ruling out extending the 90-day pause on his “reciprocal” tariffs. During a Cabinet meeting, he stated that if he cannot secure favorable deals with U.S. trading partners, tariffs will revert to higher rates after the pause.
When asked about extending the pause, he replied, “We’ll have to see what happens,” according to CNBC.
The major U.S. stock market indices closed lower today, with the S&P 500 down 3.46%, the Nasdaq falling 4.31%, and the Dow decreasing by 2.50%.
Bitcoin (BTC) gave up some of its gains from April 9 and is trading at $79,800. Overall, it was a challenging day for investors across the board.
COVID-like economic conditions
The remarks came as economic anxiety rises among U.S. monetary policymakers. Chicago Federal Reserve Bank President Austan Goolsbee expressed concern about a return to economic conditions seen during the COVID-19 pandemic.
Citing a loss of confidence and growing anxiety within the district, Goolsbee warned that setbacks in sentiment could create broader risks for the economy.
A Wall Street Journal report added further context to Trump’s trade approach, revealing that the former president had previously accepted the risk of a shallow recession in order to avoid a deeper depression.
However, amid market volatility and a sharp rise in Treasury yields, Trump reversed course on some tariffs.
The decision, influenced by collapsing bond markets and advice from National Economic Council Director Kevin Hassett, helped spur a market rebound on April 9. The S&P 500 posted its strongest single-day gain since 2008.
Treasury Secretary Scott Bessent reportedly played a significant role in coordinating the policy shift.
