[By Guancha Observer Network, Wang Yi] "Trump wants to play the hero of the market rescue, but the fact is that the economy has been hit," CNN reported on April 10th with this title. After announcing a 90-day suspension of "reciprocal tariffs" on multiple countries, US President Trump boasted to an admiring senator that the stock market had surged by an "unheard-of" margin.

However, CNN pointed out that Wall Street's reaction to Trump's reversal of tariff policies was not a celebration of investor victory but rather a stifling sigh of relief. Asset prices remain far below last week's levels, and market participants are preparing for an uncertain future.

JPMorgan Chase still insists on its prediction of an impending US economic recession. In a report released on the evening of the 9th, the bank wrote, "The chaos in trade policy and domestic fiscal affairs, along with the stock market's continued decline and loss of confidence, makes it difficult for the US to avoid a recession."

Stock Market Soars, Trump Boasts: My Achievement

On the 9th, the US stock market indeed experienced a historic day. On that day, the three major US stock indices all closed significantly higher. The S&P 500 index surged by approximately 9.5%, marking its best single-day gain since 2008; the Nasdaq Composite Index recorded its second-best single-day increase in history, soaring over 12%; the Dow Jones Industrial Average also rose by nearly 8%.

On April 9th, after five consecutive days of declines, US stocks turned positive. US media

"I guess they say this is the biggest day in financial history," Trump boasted on the 9th, stating that the stock market had risen by nearly 7 percentage points, "an unheard-of figure. This will be a record."

CNN sarcastically wrote that all of this could indeed be attributed to Trump — his extreme agenda (and the contradictory messages surrounding it) became a noose around the global financial markets, pushing them towards a destructive vortex. Since Trump announced the imposition of a 10% base tariff on global imports and personalized "reciprocal tariffs" on countries with the largest trade deficits with the US, the US stock market has lost $6 trillion in value over the past week.

In recent days, Politico reported that Wall Street power brokers have also increased their warnings about the potential threat Trump's trade policies pose to the economy. JPMorgan Chase CEO Jamie Dimon warned earlier on the 9th that a recession is now "highly likely." Bill Ackman, one of Trump's biggest supporters on Wall Street and a well-known hedge fund manager, described Trump's tariffs as an "economic nuclear war."

Trump seems unfazed by these external warnings. The White House has recently emphasized that Trump will not be swayed by the stock market. However, CNN reported that when the stock market plummeted on the 7th, a later debunked rumor temporarily reversed the market trend. This brief fluctuation allowed outsiders to glimpse what might happen if Trump were to relax tariff restrictions.

"Indeed, when trading began on the 9th, Trump posted that 'now is a good time to buy!!!'," CNN reported. Hours later, Trump suspended his "reciprocal tariff" plan, and the market immediately turned positive.

Trump insisted on his self-created social media platform, Truth Social, that this reversal was due to dozens of countries intending to renegotiate trade agreements with the US. But shortly afterward, he actually admitted that his change was mainly due to panic in financial markets.

He told reporters outside the White House, "I think people got a bit carried away. They were a bit noisy, you know, they were a bit noisy, a bit afraid," "I've been closely watching the bond market. It's very tricky. If you look at it now, it's beautiful. The bond market is currently good. But last night I saw people getting a bit uneasy."

US Treasury Secretary Scott Beetsant also insisted that the 90-day suspension does not constitute a change, as it was always part of the president's plan.

"An Epic Defeat"

Politico reported that despite efforts by the Trump administration to reassure investors and lawmakers, Trump's unexpected statement issued less than 24 hours after the announcement of so-called "reciprocal tariffs" affecting dozens of countries was not seen as a panacea for market volatility. A 90-day reprieve seemed more appropriate.

Joe Brusuelas, chief economist at consulting firm RSM, said that considering the extent of the shocks the US economy is currently facing, there is still a possibility of a recession, and these measures merely delay the series of punitive tariffs that the US may impose on its trading partners.

CNN also noted that Trump's new plan is not a full retreat. It retains some of the most aggressive tariff measures previously announced, including a 10% tariff on almost all US imports, high tariffs on Chinese goods, a 25% tariff on certain products from Mexico and Canada, and a 25% tariff on imported steel and aluminum, which remain effective. Over the next three months, the White House will negotiate with dozens of foreign governments, and given the complexity of such trade agreements, even the most meticulous White House would find itself overwhelmed.

Before Trump suspended the "reciprocal tariffs" for most countries, RSM raised the risk of a US economic recession from 20% to 55%. Brusuelas now believes that a recession is very likely to occur in the coming months because businesses have already felt the supply shock and are raising prices as promised by the White House.

Brusuelas said many clients told him they would choose to leave products at the docks because "they don't have enough cash reserves to pay taxes."

Many economists and market analysts are equally cautious about Trump's shift in attitude. Christian Hoffman, fixed income head at Thornburg Investment Management, said that even if the US government decides to ease the global trade war and shifts focus elsewhere, "we are still not out of danger," with extremely high uncertainty. Attention must be shifted from Trump's tweets to economic data to assess the damage caused.

Dan Ives, a tech investor, described Trump's suspension of the "reciprocal tariffs" as something everyone on Wall Street was eagerly awaiting, but he believed the trade war between the US and China was an "epic defeat," as it had already caused real damage to the US economy.

JPMorgan Chase also insists that the likelihood of a US and global economic recession remains at 60%. In a report released on the evening of the 9th, the bank's economists wrote that while canceling the "severe" tariffs announced on "Liberation Day" is positive under other conditions being equal, the current situation is still worrying.

The bank's economists wrote, "We believe the trade war is far from over, today's end is just the beginning of the end."

This article is an exclusive contribution from the Guancha Observer Network and cannot be reprinted without permission.

Original source: https://www.toutiao.com/article/7491606386196660736/

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