Operation over, patient healing: Trump defends reciprocal tariffs

After his new tariff rates announcement sent shockwaves through global economies and financial markets on Thursday, US President Donald Trump addressed the shock caused by his aggressive stance. He stated that the US economy would emerge 'far stronger' despite global markets taking a hit.

 

Shortly before Wall Street opened for Thursday's trading, Trump declared in a post on his Truth Social platform: "THE OPERATION IS OVER! THE PATIENT LIVED, AND IS HEALING. THE PROGNOSIS IS THAT THE PATIENT WILL BE FAR STRONGER, BIGGER, BETTER, AND MORE RESILIENT THAN EVER BEFORE. MAKE AMERICA GREAT AGAIN!!!"

 

However, Wall Street did not seem to share his optimism; most indices plunged sharply after opening, with the Dow Jones Industrial registering a 3.4 per cent fall. Trump's tariff salvo has also reignited the fears of a global recession, as well as inflation in the US. Rating agency Fitch said that the effective US import tax rate has climbed to 22 per cent under Trump, up from 2.5 per cent in 2024, a level last seen more than a century ago,  around 1910.

 

 

India, which Trump had called a 'tariff king' has been hit with 27 per cent 'reciprocal tariffs', raising concerns about their possible negative impact on India's economic growth. According to EY Chief Policy Advisor D K Srivastava, India's GDP growth could be negatively impacted by up to 50 basis points. "As per our earlier projection, the GDP growth estimate for the current fiscal was 6.5 per cent, which may go down to 6 per cent without retaliation," he said, as reported by PTI. One basis point is a hundredth of a percentage point.

 

White House defends move

 

The White House defended Trump's tariff imposition, saying they were essential to protect the America's interests. Press Secretary Karoline Leavitt sought to reassure investors, saying in an interview to CNN, "To anyone on Wall Street this morning, I would say, 'Trust in President Trump'. This is a president who is doubling down on his proven economic formula."

 

Leavitt explained that the new tariffs, which include a minimum 10 per cent reciprocal levy on imports and even higher rates on goods from various countries, including the US's largest trading partners, were part of the administration's strategy to stop the US from being "cheated by foreign nations".

 

She also dismissed speculation about the president easing up on the tariffs before they go into effect over the weekend.

 

"The president made it clear yesterday this is not a negotiation," she said. "He's always willing to pick up the phone to answer calls, but he laid out the case yesterday for why we are doing it."

 

Leavitt emphasised that countries that have been hit by particularly harsh tariffs have had decades to 'do the right thing' by US workers, but instead, they have 'ripped off American workers' and taken American jobs overseas. President Trump, she said, is putting an end to such practices.