Trump says Federal Reserve should cut rates; Canada initiates WTO dispute over car tariffs – US politics live

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Wall Street slides, putting S&P 500 into 'bear market' territory

Ding Ding! The opening bell of the New York stock exchange is ringing out, and stocks are sliding again.

The S&P 500 shares index, the broad measure of US shares, is down 3.4% at the start of trading – which takes it into ‘bear market territory’ (more than 20% below its record high).

The Dow Jones industrial average shed 1,191 points at the open, a fall of 3.1%, to 37,123 points.

And the tech-focused Nasdaq index is down 3.9%.

Traders will be reacting to the warnings from the likes of Goldman Sachs that the trade war increases the risks of a US recession, with Donald Trump not showing any signs of backing down.

Bloomberg points out that Wall Street has lost around 13% of its value since Thursday, which is the third-worst three-day run ever, after the early days of Covid-19 in March 2020, and during the 2008 financial crisis.

Trump adviser Navarro dismisses Elon Musk as 'car assembler' after 'zero tariff' comments

Donald Trump’s top trade adviser, Peter Navarro, on Monday dismissed tech-billionaire Elon Musk’s push for “zero tariffs” between the United States and Europe, calling the Tesla CEO a “car assembler” reliant on parts from other countries.

Peter Navarro is Trump’s senior counselor for trade and manufacturing. Photograph: Evan Vucci/AP

Navarro, widely seen as the architect of Trump’s tariff plans, told CNBC Musk had done a good job with his work to streamline government, but his opposition to duties was not surprising, the latest salvo in a growing feud between the Trump advisers.

“When it comes to tariffs and trade, we all understand in the White House - and the American people understand - that Elon is a car manufacturer, but he’s not a car manufacturer. He’s a car assembler,” Navarro said, adding that many Tesla parts came from Japan, China and Taiwan.

“What we want, and the difference in our thinking and Elon’s on this, is that we want the tires made in Akron, we want the transmissions made in Indianapolis,” he said.

On Saturday, Musk said that he hoped for “a zero-tariff situation” in a video-link interview with Matteo Salvini, Italy’s deputy prime minister and the leader of the far-right League party, during a League congress in Florence.

At the end of the day, I hope it’s agreed that both Europe and the United States should move ideally, in my view, to a zero-tariff situation, effectively creating a free-trade zone between Europe and North America.

His comments come after Trump’s Wednesday announcement of 20% tariffs on goods from the EU.

In an exchange that same day on his social media platform, X, Musk slammed Navarro, who has championed the tariffs.

“A PhD in Econ from Harvard is a bad thing, not a good thing,” Musk said about Navarro’s academic background, adding: “He ain’t built sh*t.”

Japan PM Shigeru Ishiba says he told Trump to rethink tariff policies

Japan’s prime minister Shigeru Ishiba said on Monday that he told Donald Trump in a phone call that his tariff policies are extremely disappointing and urged him to rethink, per Retuers.

“I’ve told the president that Japan has been the biggest investor in the United States for five straight years and the tariff policies could hurt our Japanese companies’ investment capabilities,” Ishiba told reporters after the call with Trump.

Ishiba also said he agreed with Trump to continue constructive dialogue on the issue.

Shigeru Ishiba said he has ‘no intention to engage in direct confrontation’ with the US over the tariffs but urges their removal. Photograph: KYODO/Reuters

Trump’s decision to impose a 25% levy on auto imports, and a “reciprocal” 24% tariff on other Japanese goods, is expected to deal a huge blow to Japan’s export-heavy economy with analysts predicting the higher duties could knock up to 0.8% off economic growth.

The call took place after Asian markets slumped dramatically on Monday, with Japan’s benchmark Nikkei stock index plummeting by nearly 9%.

Japan has so far taken a measured approach with Ishiba signaling earlier in the day that Tokyo would not seek direct confrontation with Washington over the tariffs.

“We have no intention to engage in direct confrontation,” he said, per The Japan Times. “While Japan is willing to cooperate in creating jobs in the United States, we also strongly urge the removal or reduction of tariffs to support that effort.”

Meanwhile Trump said Japan is sending a “top team to negotiate” on trade, referring to the conversation with Ishiba.

“Countries from all over the World are talking to us. Tough but fair parameters are being set,” Trump wrote on his Truth Social platform, without providing more details.

Countries from all over the World are talking to us. Tough but fair parameters are being set. Spoke to the Japanese Prime Minister this morning. He is sending a top team to negotiate! They have treated the U.S. very poorly on Trade. They don’t take our cars, but we take MILLIONS of theirs. Likewise Agriculture, and many other “things.” It all has to change, but especially with CHINA!!!

US central bank policymakers will get a chance to discuss the market mayhem later today, when they meet.

The Federal Reserve is holding a “Closed Board Meeting” at 11.30am ET in Washington DC for Fed board governors.

There’s only one item listed under ‘matters to be considered’:

1) Review and determination by the Board of Governors of the advance and discount rates to be charged by the Federal Reserve Banks.

The meeting has caused a little stir online and in social media, with claims that this is an emergency meeting to address the market meltdown.

However, the details of the meeting are dated 3 April, which is last Thursday, indicating it is not an emergency reaction to the slump on Friday and today.

My colleague Graeme Wearden is covering the market turmoil in detail on our business live blog:

Canada initiates WTO dispute over US 25% tariff on cars

Canada has requested WTO dispute consultations with the United States over Donald Trump’s decision to impose a 25% duty on cars and car parts from Canada, the World Trade Organization said on Monday.

Canada claims the measures are inconsistent with US obligations under various provisions under the General Agreement on Tariffs and Trade (GATT) 1994, Reuters reports.

Last week Mark Carney called Trump’s tariffs ‘unjustified, unwarranted, and in our judgement misguided’. Photograph: Kevin Light/Reuters

On Thursday Mark Carney said Canada would retaliate against the “unjustified, unwarranted” tariffs. “The president’s actions will reverberate here in Canada and across the world,” the Canadian prime minister said at a press conference. “They are all unjustified, unwarranted, and in our judgment misguided.”

He said his government would impose the taxes on vehicles that are not compliant with the continental free trade deal. The new tariffs would not apply to auto parts and would not affect vehicle content from trade ally Mexico.

On Friday we reported that automakers were already starting to shift gears to adapt to the tariffs, from pausing production to raising prices or halting certain models. Of particular relevance to Canada, Stellantis, which makes Chrysler, Dodge and RAM Truck vehicles, announced on Thursday it would pause production at some plants in both Canada and Mexico.

Its Chrysler plant in the Canadian city of Windsor, which employs 4,000 people and sits across a river from US auto capital Detroit, will pause production from 7-21st April.

Billionaire Trump backer warns of 'self-induced economic nuclear winter' as he urges president to pause tariffs

Donald Trump supporter and billionaire fund manager Bill Ackman has said the president is losing the confidence of business leaders and should pause his trade war – which could cause an economic collapse while damaging his supporters the most.

‘This is not what we voted for’ – Bill Ackman. Photograph: Kristoffer Tripplaar/Alamy

Ackman said Sunday in a post on X, the president has “launched economic nuclear war on every country in the world” and urged Trump to resolve trade issues via negotiation:

The president has an opportunity to call a 90-day time out.

If, on the other hand ... we launch economic nuclear war on every country in the world, business investment will grind to a halt, consumers will close their wallets and pocket books, and we will severely damage our reputation with the rest of the world that will take years and potentially decades to rehabilitate.

Though Trump made imposing tariffs a part of his victorious 2024 electoral campaign, which Ackman endorsed, the billionaire fund manager’s X post said:

This is not what we voted for.

In his post, Ackman also warned of lasting damage to the US’s international reputation:

By placing massive and disproportionate tariffs on our friends and our enemies alike and thereby launching a global economic war against the whole world at once, we are in the process of destroying confidence in our country as a trading partner, as a place to do business, and as a market to invest capital.

Staying the course would mean “heading for a self-induced, economic nuclear winter, and we should start hunkering down”, Ackman’s post also said. He added:

May cooler heads prevail.

Ackman’s full post is here:

‘Aggressive and arbitrary’ US tariffs need united EU response, says French minister as EU discusses next move

EU ministers are in Luxembourg to consider the European Union’s response to Trump’s sweeping tariff regime amid continuing market turmoil and heightened fears of a global economic recession.

It comes after Trump doubled down on his tariff policy in comments aboard Air Force One overnight. He said Europe “has treated us very, very badly,” and “has taken our leaders for a ride”, and declined to hold talks on changing tariffs “unless they pay us a lot of money on a yearly basis”. He also repeated criticism of Europe for not spending a fair share on Nato.

The German economic minister, Robert Habeck, called US tariffs calculations “nonsense”, while French minister delegate for trade Laurent Saint-Martin criticised the “very aggressive and arbitrary” trade measures. Both stressed the need for European partners to remain united.

The EU trade commissioner Maroš Šefčovič said EU leaders will “focus our discussion on the next steps, how to prepare our next move in relation vis a vis the US,” and how to prepare Europe for any potential “trade diversion” including support for companies. But he describes the situation “as a paradigm shift [for] the global trading system”.

My colleague Jakub Krupa is covering all the latest from the meeting – and developments from Europe more widely – over on our Europe live blog:

Netanyahu arrives in Washington as first foreign leader to try to negotiate better deal after Trump's shock tariff announcement

The Israeli prime minister, Benjamin Netanyahu, is in Washington for a second meeting since Donald Trump took office in January, where they’re expected to discuss tariffs, Iran, Israel’s war in Gaza, efforts to return the Israeli hostages, relations with Turkey, and the international criminal court, which has issued an arrest warrant for the Israeli leader for alleged war crimes in Gaza.

Benjamin Netanyahu and his wife Sara greet officials upon arrival in Washington DC on 6 April. Photograph: Avi Ohayon/Israel Government Press Office/Reuters

The meeting, which NPR notes comes on the 18-month mark since Israel’s assault on Gaza began (follow our live coverage of the war here), appears to have been arranged quite last-minute. On Thursday Trump said he expected a visit soon from Netanyahu – “maybe even next week” – though Axios reported that the timing caught Israeli officials and even some in the Trump administration by surprise.

As my colleague Bethan McKernan wrote on Sunday, this meeting will make Netanyahu the first foreign leader to travel to Washington in an attempt to negotiate a better deal with Trump after his administration’s decision last week to impose sweeping global tariffs that have shaken stock markets, wiping out $5tn (£3.87tn) in value from S&P 500 index companies by Friday’s close in a record two-day decline.

Israel had attempted to duck the shock 17% tariff on Israeli imports by moving preemptively on Tuesday – a day before the tariffs were announced – to drop all remaining duties on the 1% of American goods still affected by them. But Trump moved ahead with the tariffs, saying the US had a significant trade deficit with its Middle East ally and leading beneficiary of military aid.

The US is Israel’s closest ally and largest single trading partner. The two countries signed a free trade agreement 40 years ago and about 98% of goods from the US are tax-free.

An Israeli finance ministry official said on Thursday that Trump’s latest tariff announcement could affect Israel’s exports of machinery and medical equipment.

I’ll be bringing you all the key lines from the Trump-Netanyahu meeting as we get them. In the meantime, you can read Bethan’s full report here:

Fearing legal repercussions, online harassment and professional consequences, student journalists are retracting their names from published articles amid intensifying repression by the Trump administration targeting students perceived to be associated with the pro-Palestinian movement.

Editors at university newspapers say that anxiety among writers has risen since the arrest of Tufts University graduate student Rumeysa Ozturk, who is currently in Immigration and Customs Enforcement (Ice) detention fighting efforts to deport her. While the government has not pointed to evidence supporting its decision to revoke her visa, she wrote an op-ed last year in a student newspaper critical of Israel, spurring fears that simply expressing views in writing is now viewed as sufficient grounds for deportation.

Ozturk is one of nearly a dozen students or scholars who have been seized by immigration officials since 8 March, when Mahmoud Khalil, a Columbia graduate student and green card holder, was arrested and placed in deportation proceedings over his role in pro-Palestinian protests.

Student editors report particularly acute anxieties among international students who have contributed to their newspapers, but say that requests to take down stories over fears of retaliation are coming from US citizens, too.

Democrats have begun plotting the next phase of their electoral revival with a seven-figure spend in Virginia ahead of a vote they hope will turn into a referendum on Elon Musk.

The party, which had been despondent since Donald Trump’s victory last year, got off the canvas last week with a convincing win in a Wisconsin supreme court race and two strong congressional performances in Florida.

Now all eyes turn to Virginia as the next battleground. In November voters are set to choose a governor, lieutenant governor, attorney general and house of delegates. The election will be a bellwether not only for Trump’s presidency but tech billionaire Musk’s unofficial “department of government efficiency”, or Doge, which has hit Virginia hard because of its proximity to the federal government.

“It is his work and efforts that are going to be litigated in this election,” said Heather Williams, the president of the Democratic Legislative Campaign Committee (DLCC), which focuses on building power at state level. “We see the Doge efforts take on a local spin, meaning they’re not just talking about the machete that he wielded without any care or concern but the very real local impact and how it is affecting individuals.”

Peter Stone

As Donald Trump and Elon Musk widen their radical attacks on US judges who have stalled some of Trump’s executive orders and Musk’s slashing of federal agencies, they’re gaining backing from top House Republicans and other politicians, including some to whom the tech billionaire made big campaign donations.

The House speaker, Mike Johnson, and judiciary panel chairman Jim Jordan have echoed some of Trump’s attacks on judges, and a judiciary subcommittee hearing on 1 April explored “judicial overreach” and ways to curb judges who have stymied some Trump orders or Musk’s “department of government efficiency” (Doge) and its draconian cuts to the federal government.

Veteran Republican consultants say the hefty campaign-spending muscle of Musk, the world’s richest person, who spent about $300m helping Trump win last year, is likely to boost many Republican candidates in 2026 races, increasing pressures on members from Trump and Musk to accelerate efforts to rein in dissident judges.

“Republicans on Capitol Hill expect Musk to make a lot of donations to them in 2026,” said longtime Republican consultant Charlie Black. “But it’s likely that such donations will be coordinated with the president’s preferences.”

The verbal assaults on judges by Trump and his allies have been fueled by multiple rulings adverse to some Trump executive orders, including major court decisions in March that sought to halt deporting Venezuelan immigrants and blocking penalizing law firms that Trump deemed political enemies.

Trump says Fed should cut rates

Donald Trump said on Monday that the Federal Reserve should cut rates.

“The slow moving Fed should cut rates,” Trump reiterated in a post on his social media platform Truth Social.

But Kevin Hassett, director of the US national economic council, yesterday denied that the tariffs were part of a strategy by Trump to crash financial markets to pressure the US federal reserve to cut interest rates, insisting there were would be no “political coercion” of the central bank.

Goods imported from dozens of countries and territories are now going to be taxed at sharply higher rates, and that is expected to drive up the costs of everything from cars to clothes to computers.

A Ukrainian team will travel to the United States early this week to discuss a minerals deal, a Ukrainian source familiar with the situation told Reuters on Monday.

US president Donald Trump’s administration has proposed a more expansive minerals deal which Ukraine has been reviewing in the recent days.

China accuses US of economic bullying

China has accused the US of unilateralism, protectionism and economic bullying over tariffs.

Foreign affairs spokesperson Lin Jian told reporters: “Putting the US first over international rules is a typical act of unilateralism, protectionism and economic bullying.”

US president Donald Trump announced sweeping tariffs last week, prompting China and other governments to retaliate quickly, AP reported.

Trump put an additional 34% tariff on Chinese goods as part of “Liberation Day”, coming on top of two rounds of 10% tariffs already declared in February and March, which the US leader said was due to Beijing’s role in the fentanyl crisis.

In response, China suspended sorghum, poultry and bonemeal imports from some American companies.

The latest retaliatory moves from Beijing include more export controls on rare earth minerals, which are critical for various technologies, and filing a lawsuit at the World Trade Organization.

The EU will need to remain calm and proportionate in its response to US trade tariffs and aim for negotiations, Dutch trade minister Reinette Klever said on Monday.

“We need to get ourselves at the table with the Americans and see how we can lower these tariffs,” Klever said before a meeting of EU trade ministers in Luxembourg.

“We need to remain calm and respond in a way that de-escalates. The stock markets right now show what will happen if we escalate straight away. But we will be prepared to take countermeasures if needed to get the Americans at the table.”

Trump compares tariffs to 'medicine' as markets point to rough week ahead

Good morning and welcome to the US politics live blog. I’m Tom Ambrose and I will be bringing you all the latest news over the next couple of hours.

We start with the news that president Donald Trump says foreign governments would have to pay “a lot of money” to lift sweeping tariffs that he characterized as “medicine”, as financial markets indicated another week of steep losses could be in store.

Speaking to reporters aboard Air Force One, Trump indicated he was not concerned about market losses that has already wiped out nearly $6tn in value from US stocks, Reuters reported.

“I don’t want anything to go down. But sometimes you have to take medicine to fix something,” he said.

Trump said he had spoken to leaders from Europe and Asia over the weekend, who hope to convince him to lower tariffs as high as 50 percent due to take effect this week.

“They are coming to the table. They want to talk but there’s no talk unless they pay us a lot of money on a yearly basis,” Trump said.

Trump’s tariff announcement last week jolted economies around the world, triggering retaliatory levies from China and sparking fears of a global trade war and recession.

On Sunday morning talkshows, Trump’s top economic advisers sought to portray the tariffs as a savvy repositioning of the US in the global trade order. They also tried to minimize the economic shocks from last week’s tumultuous roll out. Wall Street stock futures opened sharply lower on Sunday, in a sign of further turbulence.

Treasury secretary Scott Bessent said more than 50 nations had started negotiations with the U.S. since last Wednesday’s announcement.

“He’s created maximum leverage for himself,” Bessent said on NBC News’ ‘Meet the Press’. Neither Bessent nor the other officials named the countries or offered details about the talks. But simultaneously negotiating with multiple governments could pose a logistical challenge for the Trump administration and prolong economic uncertainty.

Bessent said there was “no reason” to anticipate a recession, citing stronger-than-anticipated US jobs growth last month, before the tariffs were announced.