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Trump compares tariffs with'medicine' after Asian markets erupt

U.S. president Donald Trump said that foreign governments will have to pay a "lot of money" in order to lift the sweeping tariffs he called "medicine." This has caused further turmoil on global financial markets.

Asian stocks suffered steep losses on Monday morning. U.S. futures markets opened with sharply lower prices as investors expressed concerns about Trump's tariffs, which they feared could lead to higher costs, a weaker economy, a drop in confidence, and even triggering a global economic recession.

Trump told reporters on Air Force One that he wasn't concerned about the losses of trillions of dollars from stock markets all over the world.

"I don’t want anything to fall. "But sometimes you need to take medicine to cure something," he said, as he returned after a golf weekend in Florida.

Trump claimed he spoke to leaders in Europe and Asia on the weekend. They hope to convince Trump to lower tariffs by up to 50%, which are due to come into effect this week.

They are at the table. "They want to talk, but they won't talk until we pay them a lot of cash on an annual basis," Trump said.

Trump's announcement of tariffs last week shocked economies around the globe, prompting retaliatory measures from China. Fears were raised about a global recession and trade war.

Investors and politicians have been trying to figure out whether Trump's tariffs will be permanent or just a tactic used to get concessions from countries.

Trump's economic advisors tried to present the tariffs on Sunday morning talk shows as a clever repositioning by the U.S. within the global trading order.

Treasury Secretary Scott Bessent stated that more than fifty nations have begun negotiations with the U.S. following last Wednesday's announcement. Bessent told NBC News' Meet the Press that "he's created maximum lever for himself".

Howard Lutnick, Commerce Secretary at CBS News, said that the tariffs will remain in effect "for days and even weeks."

Kevin Hassett, White House economist, sought to calm concerns that tariffs were part a strategy designed to pressure the U.S. Federal Reserve into lowering interest rates. He said there would not be any "political coercion".

JPMorgan's economists estimate that tariffs will cause the U.S. Gross Domestic Product to decline by 0.3% in the full year, compared to an earlier estimate of growth of 1.3%. They also predict the unemployment rate will rise from its current 4.2%, to 5.3%.

Bill Ackman is a billionaire fund manager who has endorsed Trump for president. He said that Trump had lost the confidence of many business leaders, and warned him of a "economic nuclear Winter" if he didn't take pause.

Tariff negotiations began on Saturday when U.S. Customs agents started collecting Trump's 10% unilateral tariff on all imports. The "reciprocal tariff" rates will increase to 11% to 50 % on certain countries on Wednesday, at 12:01 am EDT (4:01 am GMT).

Several governments have indicated a willingness for engagement with the U.S. in order to avoid duties. Taiwan's president Lai Ching Te on Sunday offered no tariffs as a basis for discussions with the U.S. He pledged to remove trade barriers, and said Taiwanese firms would increase their U.S. investment. Benjamin Netanyahu, the Israeli Prime Minister, said that he will seek to have a reprieve on a 17% tax on Israel's products during his meeting with Trump scheduled for Monday. A government official in India said that the country did not intend to retaliate for a 26% tax and that talks with the U.S. were underway over a potential deal. Giorgia Melons, a Trump ally in Italy, pledged to protect businesses from the planned 20% tariffs on EU goods. Italian wine producers and U.S. Importers said that business has already slowed down and they fear further damage.

(source: Reuters)