President Donald Trump on Thursday expressed continued optimism that his unprovoked trade war would bear fruit for American industries even as he acknowledged some negative consequences to financial markets in the near term.
Speaking at the outset of a cabinet meeting, Trump said he and his cabinet had been “talking about a lot of different things” and touted recent economic indicators showing inflation and interest rates on a downward trajectory.
He also described the turmoil in stock and bond markets that led to his abrupt decision to reverse massive increases in import taxes from nearly every country in the world as “a big day,” highlighting the record stock market gains in the hours after he announced the move.
“We’re working with a lot of different countries, and it’s all going to work out very well. I think it’s going to work out really, very well. But we’re in good shape,” Trump said as he repeated an oft-used line about the lack of inflation during his first term after he imposed limited tariffs on some classes of Chinese imports, including on steel and aluminum.
He said his first-term experience with the limited tariffs should mean there won’t be runaway inflation on account of the massive 145 percent tariffs he is now imposing on all American imports from China despite the predictions of most economists and said the move is necessary to force a return of industrialized manufacturing to American shores.
“We think we’re in very good shape. We think we’re doing very well again. There’ll be a transition cost and transition problems, but in the end, it’s going to be, it’s going to be a beautiful thing,” he said.
Trump’s positive comments and dismissal of any risk of inflation from more than doubling the cost of imports from one of America’s largest trading partners came just as stock markets were in the middle of a massive slide and essentially erasing the historic gains they’d made a day earlier when he’d announced a 90-day pause on his sweeping tariff plan.
At 12.45 p.m. Thursday, the Dow Jones Industrial Average was down 1,687 points, or 4 percent and the NASDAQ index had dropped 957 points, or 5.5 percent.
Just a day earlier, the stock markets surged after Trump unveiled a 90-day reprieve on his across-the-board tax — a move that prompted investors to reverse course after a rocky week.
Asked about the latest stock market slide during a question and answer session with reporters, Trump said he had not had a chance to see the latest stock numbers because he’d been busy with the cabinet meeting.
He ceded the floor to Treasury Secretary Scott Bessent, who told reporters that he believes the U.S. “will end up in a place of great certainty” during the 90-day pause on the tariffs that Trump had announced on Wednesday. Bessent also described the most recent inflation data released this week as “very good.”
“Oil is down, we had a successful bond market. So I don’t think see anything unusual today,” he added.