‘LIBERATION DAY’ FALLOUT CONTINUES — As President Donald Trump’s global trade war upends the stock market for the second week in a row, leaders around the globe, and here at home, have started to push back. Here’s where we are at so far … Volatile markets at home, and abroad: As expected, Wall Street faced another painful moment when markets opened this morning as the economic impacts of Trump’s trade war looms over weary investors. Just after opening, the Dow Industrial Index dropped 1,200 points while the S&P 500 faced its “worst three-day performance” since October 1987, per Bloomberg’s Joe Weisenthal. The early morning dip comes after global markets took a nosedive overnight, with “Hong Kong suffering their steepest fall since the 1997 Asian financial crisis,” Semafor’s Paige Bruton reports.) But the numbers were on the upswing later in the day shortly after a CNBC headline claimed Trump’s economic adviser Kevin Hassett said the president was considering a 90-day tariff pause for all countries except for China. The markets quickly spiked in response — only to tumble again when White House Press Secretary Karoline Leavitt denounced the story as “fake news.” The whiplash goes to show just how badly Wall Street is hoping Trump will bring an end to the trade drama. In his annual letter to shareholders, the JPMorgan Chase CEO Jamie Dimon cautioned that the trade wars could threaten the U.S.’s long-term economic alliances: “The quicker this issue is resolved, the better because some of the negative effects increase cumulatively over time and would be hard to reverse,” Dimon wrote. More per POLITICO’s Sam Sutton Meanwhile, global leaders have signaled they’re open to negotiations – to an extent. Ursula Von der Leyen, president of the European Commission, told reporters the group had repeatedly offered zero for zero tariffs “long before” Trump’s latest trade announcement and they’re willing to agree to the same thing now, CNN’s James Frater and Christian Edwards report: “Europe is always ready for a good deal. So we keep it on the table,” Von der Leyen said. In a 25-minute phone call with Trump today, Japanese PM Shigeru Ishiba also suggested negotiations, telling reporters he urged Trump to reconsider the tariffs, noting “the tariff policies could hurt Japanese companies' investment capabilities.” But Trump isn’t letting up yet. In a Truth Social post, the president ramped up his trade threats against China — demanding Beijjing rescind its 34 percent retaliatory tariffs against the U.S. or face additional 50 percent tariffs starting Wednesday. The president also warned he will cease negotiations with China if it doesn’t withdraw the measures. “[A]ny country that Retaliates against the U.S. by issuing additional Tariffs, above and beyond their already existing long term Tariff abuse of our Nation, will be immediately met with new and substantially higher Tariffs,” Trump wrote, repeating his warning shot to other countries considering similar moves. The president added negotiations with other countries “that requested a meeting” will take place “immediately.” So what now? With Trump and Chinese President Xi Jinping seemingly locked in a battle of wills, it’s unclear what happens next. But if tensions reach an ultimatum, “Beijing has other options,” per Bloomberg: “If past actions were any guide, it could let the yuan weaken to offset the impact of tariffs, tighten export controls on critical minerals or increase pressure on US companies operating in China.” More tariff reads: “The Tsunami Is Coming’: China’s Global Exports Are Just Getting Started,” by NYT’s Keith Bradsher…. “Here Are the Places Where the Recession Has Already Begun,” by The Atlantic’s Annie Lowrey THE HILL HAS EYES — Opposition continues to mount on Capitol Hill as some lawmakers — including long-time Trump allies — grow nervous about the economic toll of Trump’s trade war. A vivid image: In a new episode of his “Verdict” podcast, Sen. Ted Cruz (R-Texas) urged Trump to use this moment “as leverage” rather than enforce long-term tariffs: “[T]here are angels and demons sitting on President Trump’s shoulders. Who does he listen to? I hope he listens to the angels,” Cruz said. ICYMI: Rep. Don Bacon (R-Neb.) is also planning to introduce a bill today that would reclaim Congress’ authority over tariffs and limit presidential power over trade. The bill mirrors that of Sens. Chuck Grassley (R-Iowa) and Maria Cantwell (D-Wash.) in the upper chamber, where seven GOP Senators have signed on so far. Not signed on? Sen. Rand Paul. The Kentucky Republican says he has his own measure he wants to introduce that would take Congress’ powers further as he rails against Trump’s ongoing trade war. Though any such bill faces long odds in Congress, “Paul said a handful of Senate Republicans had told him privately that they supported his efforts even if they were unwilling to defy Trump by voting to overturn his tariffs,” WaPo’s Liz Goodwin and Theodoric Meyer report. Meanwhile, the White House isn’t taking the challenge lightly. In a SAP sent out to congressional offices today, the administration threatened to veto the Senate bill should it pass, arguing it would encroach on the president’s power to national emergencies and threats: “If passed, this bill would dangerously hamper the President’s authority and duty to determine our foreign policy and protect our national security.” More per Punchbowl’s Andrew Desiderio And hot on the left … Sen. Brian Schatz (D-Hawaii) is expanding his blockade to include a total of 300 Trump’s agency and department nominees in addition to several foreign relations bills,Axios’ Stephen Neukam scoops. Schatz called on his GOP colleagues, “who he said he thinks are privately panicked and frustrated, to publicly push back against the White House.” “You can't be a senator in private,” Schatz said. “If you're going to stand up to the president, people have to see you doing it.” Good Monday afternoon. Thanks for reading Playbook PM. Drop me a line at birvine@politico.com.
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