Global economies hang in the balance with Trump’s tariffs set to officially go into effect

Amna Nawaz:

Just hours before major new tariffs are set to kick in, President Trump and his team said he remains open to deals, but generally would not back down from levies on goods from more than 80 countries. That includes a 104 percent tariff on China set to take effect at midnight. That message helped kill an early rally in the markets and the Dow swung by nearly 1,800 points.

The Dow closed at its lowest point in about a year, finishing down about eight-tenths of a point. The Nasdaq was down more than 2 percent and the S&P 500 dropped more than 1.5 percent.

Stephanie Sy begins with this report.

Stephanie Sy:

On Wall Street this morning, stocks around the world began the day with a bounce after days of losses set off by tariff turmoil.

Scott Bessent, U.S. Treasury Secretary:

Everything is on the table.

Stephanie Sy:

Before the opening bell, Treasury Secretary Scott Bessent had told CNBC that U.S. trading partners are eager to negotiate and strike new deals.

Scott Bessent:

I think there's going to be a lot of back-and-forth. President Trump is going to be personally involved in the negotiations. And we will see what the — what our trading partners offer.

Stephanie Sy:

The market optimism had faded by the time the president spoke this afternoon, saying the U.S. is now taking in $2 billion a day on tariffs and claiming 70 countries are ready to strike a deal.

Donald Trump, President of the United States: Right now, Japan is flying here to make a deal. South Korea is flying here to make a deal. And others are flying here. Our problem is, can't see that many that fast. But we don't have to because, as you know, the tariffs are on.

Stephanie Sy:

But while, negotiations play out, on Capitol Hill…

Man:

The committee will come to order.

Stephanie Sy:

… Trump's new trade ambassador, Jamieson Greer, confirmed there will be no immediate tariff exemptions for individual products or companies.

Jamieson Greer, U.S. Trade Representative:

The president has been clear with me and with others that he does not intend to have exclusions and exemptions, especially given the nature of the action. If you have Swiss cheese in the action, it can undermine the overall point, which is to give it a deficit, achieve reciprocity.

Stephanie Sy:

Members of the Senate Finance Committee, including several Republicans, raised concerns and doubts.

Sen. Steve Daines (R-MT):

Who pays these high tariffs? In the short, medium term, it will be the consumer. It will be the consumer. And so I'm worried about the inflationary effect.

Sen. Ron Johnson (R-WI):

I don't often agree with the members on the other side of the aisle, but in many cases here today, particularly when they're expressing concern about small businesses in their states, I'm hoping you're very — and I hope you and the president are very sensitive about companies potentially going bankrupt by these actions.

Stephanie Sy:

Real-world effects to a trade war that has escalated quickly. Yesterday, Trump threatened to slap even more tariffs on China after the economic superpower retaliated with tariffs of its own. The Trump administration is not backing down.

Jamieson Greer:

They have agency in this. They elected to announce retaliation. Other countries did not. Other countries signaled that they'd like to find a path forward on reciprocity. China has not said that. And we will see where that goes.

Stephanie Sy:

Beijing has yet to flinch.

Lin Jian, Chinese Foreign Ministry Spokesperson (through translator):

Pressure, threats and blackmail are not the right ways to deal with China. If the U.S. disregards the interests of both countries and the international community and insists on engaging in a tariff war and trade war, China will fight to the end.

Stephanie Sy:

Tensions between global heavyweights and increasingly in Trump's inner circle. Today on X, Elon Musk called Peter Navarro, a key architect of Trump's trade policy — quote — "dumber than a sack of bricks."

Navarro characterized Tesla as a car assembler that depends on imported car parts.

At the White House today, Press Secretary Karoline Leavitt chalked up the spat to transparency.

Karoline Leavitt, White House Press Secretary:

These are obviously two individuals who have very different views on trade and on tariffs. Boys will be boys and we will let their public sparring continue.

Stephanie Sy:

All this as economies hang in the balance. New tariffs are set to officially go into effect at midnight tonight.

For the "PBS News Hour," I'm Stephanie Sy.