Former US treasury secretary slams Trump tariffs as ‘worst self-inflicted wound’ ever on a successful economy – business live
Former US treasury secretary Janet Yellen: Trump’s economic policies are ‘worst self-inflicted wound’ by any administration
Former US treasury secretary Janet Yellen has said that the recent rise in Treasury yields likely played a role in former president Donald Trump’s decision to pause planned tariffs.
In an interview with CNN International, Yellen, who is also a former Federal Reserve chair, criticized Trump’s economic approach, calling it the “worst self-inflicted wound” an administration has imposed on an otherwise well-functioning economy.
Yellen also expressed concern over the direction of US economic policy under Trump, warning that such measures have increased the likelihood of a recession.
Key events
Trump tariffs on China now 145%, White House confirms to CNBC
The overall US tariff rate on Chinese imports has risen to 145%, a White House official has confirmed to CNBC.
The increase follows a new executive order from Donald Trump raising tariffs to 125%, up from 84%.
An additional 20% tariff, tied to measures targeting fentanyl-related imports, brings the total to its current level.
The move marks another escalation in US trade policy toward China.
Argentina’s largest workers’ unions kicked off a massive 24-hour strike on Thursday, bringing trains, planes and ports to a halt as they protested against sweeping austerity measures from libertarian president Javier Milei’s government.
The capital, Buenos Aires, was quiet on Thursday morning, though public buses were running as usual. Banks and schools shuttered, and public hospitals and government agencies were running on skeleton staffing, Reuters reported.
On Wednesday, ahead of the strike, workers joined a weekly pensioners’ protest in front of Congress. Retirees have seen their pension funds slashed and their protests have ended in violence in recent weeks as sympathetic groups, such as soccer fans, have clashed with police.
“After this strike, they have to turn off the chainsaw,” said Rodolfo Aguiar, general secretary of the ATE Nacional union, referring to Milei’s analogy for slashing public spending.
“It’s over, there’s no more room for cuts,” Aguiar added.
As a reminder, there’s a list of the tariffs originally threatened by Donald Trump, before he dialed them back to 10% for 90 days, here:
Roubini: Recession is avoidable, says ‘Dr Boom’
Helena Smith
Ever the contrarian, Nouriel Roubini, the economist better known as Dr Doom, has dismissed prognostications of global recession as overblown.
Speaking at the Delphi Economic Forum in Greece hours after Trump pressed the pause button on his trade war, the renowned policy expert said he believed compromise would prevail and ultimately save the day.
He told an audience gathered in the mountain town for the tenth iteration of the forum:
“They call me Dr Doom but I’ve always been a contrarian. Wall Street has been predicting a recession, but I actually think it is avoidable. I might as well be Dr Boom.”
Roubini, who in 2006 had correctly warned of the recession that the credit and housing market bubble would unleash, said it was quite feasible that a US-EU trade deal could be pulled off in a matter of months or “even a month.”
He argued that the US and Europe will reach an compromise.
“With friends and allies you are gonna reach a deal.
“The euro can go up and down [by] 10 [or] 20 percent in a matter of months … you can live with 10 percent tariff, so with most of the world that is going to happen, that reduces the market tensions and reduces the risk of an US and global recession.”
But with China he forecast “a different story.” Without “a grand bargain” that could dissolve tensions the threat to US and global economic growth lingered, he said.
“China is worried that the US is out to destroy [it], not only trade wise but also economically and also militarily and therefore for the time being this game of chicken between the US and China is going to continue, the question is, who is going to blink, whether they can sit down and find a grand bargain.”
He continued:
“I fear that even if they sit down and try to negotiate … with China it’s a bigger mess and mostly likely, for now, we are escalating rather than de-escalating and that’s still a threat to US economic growth, to global economic growth and to the markets.”
The day so far
On the fourth day of another turbulent week, here’s where things stand today:
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US stocks has slipped back in early trading today, a day after surging on relief that Donald Trump had postponed most of the new tariffs announced last week.
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The main stock indices are in the red in New York, with the S&P 500 index currently down 3%, or 164 points lower, at 5,292 points.
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But European markets are on track for one of their best sessions since 2020, as investors react to last night’s u-turn from Trump.
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In London, the FTSE 100 is currently up 307 points, or 4%, at 7985 points, which could be its best day since November 2020.
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White House National Economic Council Director Kevin Hassett has lifted the mood, telling CNBC that trade talks with some US counterparts are already well advanced, including deals that were close to done last week.
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Yesterday’s tariff reprieve has been welcomed in South Korea, Taiwan, and Vietnam, where governments have said the pause will allow them “breathing room” and time to negotiate with the Trump administration.
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There is also relief that the European Union has paused its new tariffs against the US for 90 days, to allow time for negotiations with Donald Trump.
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But China has said Donald Trump’s trade war with Beijing “will end in failure” for Washington, hours after the US president announced he would increase his tariffs on the country’s imports to 125%.
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China’s own 84% retaliatory tariffs on US imports came into effect today amid an escalating trade war between the world’s two biggest economies.
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There have been calls for a clampdown on trading by members of Congress, amid claims of market manipulation by the Trump White House
Donald Trump has welcomed the drop in the CPI index last month, posting on Truth Social:
Just out: “INFLATION IS DOWN!!!”
UBS is cautioning that market volatility is likely to remain elevated in the weeks ahead.
Mark Haefele, chief investment officer at UBS Global Wealth Management, says:
“Despite Wednesday’s announcements to lower the reciprocal tariff rate for most countries to 10%, the escalation between the US and China could dramatically impact trade between the world’s two largest economies.
We currently estimate the overall US effective tariff rate at 27% (versus 9% prior to 2 April). Excluding trade with China, the effective tariff rate is 11%.”
The early drop in stock prices in New York today suggests the euphoria that drove Wednesday’s dramatic rebound was “was short-lived”, reports Fawad Razaqzada, market analyst at City Index and FOREX.com.
Razaqzada explains:
The renewed weakness came as investors wondered what the true impact of Trump’s tariff shuffle might be and figured it may be prudent to hit the pause button while the trade war between the US and China continues.
That being said, dip-buyers will be lurking for opportunities after the big reversal yesterday, and we could still seem some decent bounce trades here and there while the market finds a new equilibrium price.
The trend is still technically bearish given the lower highs, and for that reason, the bulls should not get complacent and still trade from level to level until more evidence of a market bottom emerges. Thus, the Nasdaq 100 forecast is yet to turn decidedly bullish.
Wall Street opens lower
As feared, Wall Street has opened in the red after yesterday’s historical surge.
The S&P 500 index, the broad measure of the US stock market, has dropped by 2.1% at the start of trading.
That comes a day after its third-best day since the second world war, when the S&P 500 surged by over 9% after Donald Trump paused most new tariffs for 90 days.
The Dow Jones industrial average dropped 1.6%, or 675 points, at the open to 39,932 points.
The tech-focused Nasdaq index is down 2.7%, as traders ponder how much damage the new US and China tariffs on each others exports will hurt the technology sector.
Those lingering concerns over the impact of a trade war are countering optimism after the EU has paused its new tariffs on the US for 90 days, and White House National Economic Council Director Kevin Hassett said that trade talks with some US counterparts are already well advanced.
Speaking of the Bank of England … its deputy governor Sarah Breeden has warned that US tariffs are likely to lower UK growth.
Breeden told an MNI Livestreamed Connect event today.
“Expenditure switching by US consumers away from UK goods, combined with weaker global demand due to potential counter tariffs and supply chain disruptions would be expected to weigh on UK activity.
The impact on inflation, however, is not that clear cut.”
Back in the UK, the Bank of England has postponed an auction of long-dated British government debt, due to the market turmoil this week.
Reuters has the details:
The Bank of England said on Thursday that it was postponing an auction of 750 million pounds of long-dated government bonds due on April 14 as a result of recent financial market turmoil.
The BoE said the sale – part of the BoE’s efforts to reduce the huge stockpile of bonds it built up under QE – would be delayed until the following quarter and that it would hold an auction of short-dated government bonds on April 14 instead.
These auctions are part of the BoE’s “quantitative tightening” programme, where it sells the assets it bought through its recent stimulus programmes.
Wall Street to drop despite talk of trade deals
After a euphoric session yesterday, after Donald Trump pressed pause on his trade war with most of the world, Wall Street is heading for losses today.
The futures market shows the Dow Jones Industrial Average could drop by 1.6%, while the broader S&P 500 index is called down 2.1%.
Technology stocks are set for losses, with the Nasdaq futures down 2.5%.
Investors will have noted the comments from White House National Economic Council Director Kevin Hassett today, who said that trade talks with some US counterparts are already well advanced.
There will also be relief that the EU has paused its new tariffs on the US for 90 days, to create a window for negotiations.
But there are also concerns that tensions between Washington DC and Beijing have escalated, with the US hiking China’s tariffs to 125%.
China insisted today that Donald Trump’s trade war with Beijing “will end in failure” for Washington, as its 84% retaliatory tariffs on US imports came into effect today.
