The US stock market fell sharply after President Donald Trump announced new tariffs on April 2. Wall Street dropped for the second day in a row. The Dow Jones went down 5.5%, and the S&P 500 fell 5.97%.

As a result, investors lost around $6 trillion, according to an AFP report. Most of these losses affected the retirement and investment accounts of ordinary Americans.

Trump Defends His Tariff Policy

Despite the market chaos, Trump stood firm. On Truth Social, he wrote, “This is a great time to get rich—richer than ever before!!! My policies will never change.” He brushed off concerns and urged investors to see opportunity.

Confidence in Economic Boost

Furthermore, Trump claimed that businesses are not alarmed. “Big business is not worried about the Tariffs,” he said. He added, “They are focused on the BIG, BEAUTIFUL DEAL, which will SUPERCHARGE our Economy.”

He believes these tariffs will force companies to manufacture in the US. That, he argues, will create more jobs for Americans. However, critics say this shift won’t happen immediately.

China Hits Back

Meanwhile, China retaliated by imposing a 34% duty on US imports. This new tariff will take effect on April 10. Trump responded defiantly, saying, “China played it wrong, they panicked—the one thing they cannot afford to do!”

Legal Threat and Export Restrictions

In addition, China threatened to sue the US at the World Trade Organization over the tariff policy. On the same day, it restricted exports of rare earth elements like samarium, terbium, dysprosium, and others. These materials are critical for US tech and medical sectors.

Dependence on China

According to Bloomberg, the US Geological Survey (USGS) reported that from 2020 to 2023, 70% of US rare earth imports came from China. This restriction has placed many American industries at risk.

Rising Fears of Global Recession

Consequently, experts worry the tariffs could spark a global recession. The IMF defines a recession as two straight quarters of economic decline. Although short declines don’t qualify, the current trend shows warning signs. Markets around the globe are now feeling the pressure. The fear of a slowdown continues to grow.