TRUMP’S TRADE WAR ESCALATES — China’s announcement of 34% tariffs on U.S. imports this morning overshadowed the better-than-expected jobs report and triggered another day of tumbling stocks. Beijing said its retaliatory measures would begin April 10 and match President Donald Trump’s “reciprocal” 34% measure that he ordered Wednesday, AP’s Huizhong Wu and Elaine Kurtenbach report from Bangkok. The Chinese government also said it “will impose more export controls on rare earths, which are materials used in high-tech products such as computer chips and electric vehicle batteries.” Investors were already bracing for another day of losses after yesterday marked the steepest decline for the U.S. stock market since 2020. Just minutes after trading opened this morning, the renewed tariff anxiety spurred the Dow Jones Industrial Average to plummet over 1,200 points, dropping a total of 1,700 points by this afternoon. The S&P 500 also took a hit today, dropping by 4.8% as of this afternoon, AP’s Stan Choe reports. Losses were spread over several industries, including “technology companies as well as firms that rely on Chinese manufacturing in their supply chains,” NYT’s Eshe Nelson and Keith Bradsher report. Meanwhile, today’s strong jobs report did little to buoy the markets. More on that below So what now? China’s announcement brings the world to the edge of an all-out trade war, as the European Union and other large economies mull over their own reciprocal tariffs. But Trump isn’t letting up. Despite a wave of criticism from economists, the president doubled down on his policies in a series of Truth Social posts this morning, telling investors “MY POLICIES WILL NEVER CHANGE” and attacking China’s tariff announcement: “CHINA PLAYED IT WRONG, THEY PANICKED - THE ONE THING THEY CANNOT AFFORD TO DO!” More from POLITICO’s Koen Verhelst, Phelim Kine and Carlo Martuscelli IT’S JOBS DAY — As the U.S. economy continues to reel from Trump’s “Liberation Day” announcements, the monthly job report reflects a much stronger showing than expected. New labor department statistics out today show the U.S. added an estimated 228,000 jobs in March — far more than the 140,000 economists had expected. Though analysts have predicted a cooling in economic growth this year, the measure is arguably a flawed snapshot of today’s economy — since the full effect of Trump’s tariffs and the job cuts from DOGE won’t be fully reflected for months. Still, as our POLITICO colleague Victoria Guida reports this morning, “that also makes them a useful gauge for how things were going before the economy gets smacked by disruptive new policies.” A look at the numbers …
- Unemployment ticked up slightly to 4.2% from 4.1% the month before.
- Employment in the healthcare, social assistance and transportation industries had an uptick in jobs.
- Federal government employment declined by “4,000 in March, following a loss of 11,000 jobs in February,” per the Bureau of Labor Statistics.
Victory lap from the West Wing … In a post on Truth Social, Trump described the numbers as “GREAT. FAR BETTER THAN EXPECTED,” adding “IT’S ALREADY WORKING. HANG TOUGH, WE CAN’T LOSE!!!.” And caution from the markets … The jobs report dropped just an hour before jittery investors opened the trading lines this morning, and in sum, they haven’t made much of a difference. Tariffs, not jobs, continue to dominate investor concern: Goldman Sachs Asset Management’s Lindsay Rosner noted despite the strong showing, the jobs “number has become a side dish with the market just focusing on the entrée: tariffs,” NYT’s Joe Rennison reports. POWELL’S STATE OF PLAY — In a speech at a Virginia conference today, Federal Reserve Chair Jerome Powell noted that while the latest tariffs are likely to raise inflation rates, the agency is continuing its wait-and-see approach before moving on interest rates. Powell said the announced tariffs were “significantly larger than expected,” and “the same is likely to be true of the economic effects, which will include higher inflation and slower growth … It is too soon to say what will be the appropriate path for monetary policy.” While Powell noted that retaliatory tariffs were something the agency was watching for, he made no specific mention of China’s recent announcement. The remarks came minutes after Trump called Powell “late” in yet another Truth Social post urging him to “STOP PLAYING AROUND” and cut interest rates already. More tariff reads: “JD Vance bashed tariffs during Trump’s first term. Now, as VP, he’s championing them,” by CNN’s Andrew Kaczynski and Em Steck … “How Tariffs Have Worked for Four Other Countries,” by WSJ’s Tripti Lahiri, Ryan Dubé and Peter Landers … “Nonprofit group mounts legal challenge to Trump’s tariffs on China,” by WaPo’s Justine McDaniel … “Farmers are no strangers to trade wars. But this time may be worse,” by POLITICO’s Marcia Brown Happy Friday afternoon. Thanks for reading Playbook PM. Drop me a line at birvine@politico.com.
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