Trump's Economic Tug-of-War
What has President Trump said this week?
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What has President Trump said this week? 〰️
Trump vs. Powell
Earlier this week, President Donald Trump reignited his long-standing feud with Federal Reserve Chair Jerome Powell, calling him a “major loser” on social media and urging the Fed to cut interest rates “pre-emptively” to stimulate the economy. The President accused Powell of being too slow to respond to evolving economic conditions, a familiar criticism that dates back to Trump’s first term.
The renewed pressure on the Fed comes amid rising concerns over the economic fallout from the administration’s own tariff and trade policies. Chair Powell has previously cautioned that tariffs could lead to higher consumer prices and slower growth (BBC, 2025), a view that contrasts with the White House’s more aggressive push for monetary easing.
Markets responded sharply to the escalating rhetoric. On Monday, the S&P 500 and Dow Jones Industrial Average each dropped approximately 2.4%, while the Nasdaq fell over 2.5%, reflecting investor anxiety over both Fed independence and broader policy uncertainty (BBC, 2025). However, by April 22, Trump appeared to backtrack on speculation that he intended to remove Powell, stating “Never did,” and blaming the media for mischaracterizing his position (Bloomberg, 2025). Still, he reiterated his desire for more aggressive action from the Fed, framing his remarks as a broader call for stimulus in the face of global instability.
While the President may express frustration, the Federal Reserve remains an independent institution. Under current law, the President cannot remove the Fed Chair without cause, and Powell’s term runs through May 2026. For now, Powell’s job appears secure, at least legally. With the IMF and World Bank holding their spring meetings this week, the spotlight will remain firmly on the U.S. economy, Fed leadership, and how political pressures could shape monetary policy and global investor confidence in the months ahead.
2. Ukraine left behind, again
The Trump administration has voiced increasing frustration over the lack of progress in Ukraine-Russia peace negotiations, suggesting it may be prepared to “move on” if a resolution remains elusive. Despite campaign promises to swiftly end the war, President Trump’s current posture appears to have frozen the status quo on the battlefield, effectively legitimizing Russian control over occupied Ukrainian territory (Reuters, 2025).
In a recent statement, Trump remarked, “[…] if for some reason one of the two parties makes it very difficult, we're just going to say, ‘you're foolish, you're fools, you're horrible people, and we're going to just take a pass. But hopefully we won't have to do that’” (Times News, 2025).
Adding to the controversy, the U.S. has conducted high-level meetings with Russian officials that excluded Ukrainian representatives, despite Trump’s insistence that Ukraine remains central to the process. One such meeting, held in February in Riyadh, notably did not include Ukraine (BBC, 2025). Secretary of State Marco Rubio defended the decision, stating that the administration is focused on achieving “constructive and realistic outcomes.” Critics argue that the terms under discussion appear to favor Russian interests and could erode Ukraine’s sovereignty. Ukrainian President Volodymyr Zelensky has openly criticized the U.S. approach, accusing American negotiators of “repeating Russian narratives” (BBC, 2025).
The developments have raised alarms among Western allies, who fear that a unilateral U.S.-Russia peace framework could signal a weakening of Western unity and a de facto acceptance of Russia’s territorial claims.
3. Tariffs: Strategic Rebalancing or Tactical Retreat?
On April 22nd, President Trump signaled a potential shift in U.S.-China trade policy by announcing a reduction in the 145% tariffs on Chinese imports. While emphasizing that tariffs would “come down substantially,” he clarified that they “won’t be zero” (The Guardian, 2025). The move suggests a possible de-escalation of trade tensions, though the broader impact on global trade dynamics and domestic prices remains uncertain.
Following the announcement, Treasury Secretary Scott Bessent reinforced the administration’s softer stance, stating on April 23rd that the current level of tariffs is “not sustainable.” He emphasized the need for a rebalancing of trade relations rather than a full economic decoupling between the U.S. and China (Reuters, 2025).
Markets responded swiftly. U.S. equities surged after Bloomberg News reported Bessent’s remarks, with the S&P 500 rising 2.5%. Asian markets followed suit the next day: Hong Kong’s Hang Seng gained over 2%, Japan’s Nikkei 225 climbed nearly 2%, and South Korea’s Kospi advanced 1.5% (The Guardian, 2025; CNN, 2025).
Despite the softened rhetoric, tensions persist. China’s Foreign Ministry criticized the U.S. approach, warning that “maximum pressure” tactics would not succeed and calling for mutual respect in negotiations (CNN, 2025). President Trump, however, reaffirmed his “very good relationship” with Chinese President Xi Jinping and insisted, “Ultimately, they have to make a deal” (CNN, 2025).