Business
Markets devastated as recession fears grow over Trump tariff plan
WASHINGTON — A second day of market devastation shook Washington on Friday, vanishing more than $5 trillion in value in one of the largest 48-hour losses on record — an extraordinary rout caused not by pandemic, war, terrorism or bank failure, but by policy set by the American president.
The policy, announced by President Trump on Wednesday, would levy steep tariffs on nearly every nation in the world in the coming days, starting with a base tariff rate of 10% but climbing higher for some of the largest U.S. trading partners, including China, South Korea, Japan and the European Union.
The market drop has prompted a small but influential group of Republican senators to partner with Democrats in a nascent effort to wrest back control over tariff policy from Trump.
The Standard and Poor’s 500, NASDAQ and the Dow Composite all reeled over the news from the morning bell to close. The Dow dropped 2,231.07 points, or 5.5%, in its largest drop since the pandemic started, following a 1,679-point drop the day prior. The S&P 500 fell 5.97% to 5,074.08, and the NASDAQ dropped 5.8%, to 15,587.79, entering bear market territory.
Before the markets opened Friday, China announced it would reciprocate with a 34% tariff on imported U.S. goods. And as markets spiraled, the Federal Reserve chair, Jerome Powell, warned of “persistent” negative effects from the new trade policy.
“We face a highly uncertain outlook with elevated risks of both higher unemployment and higher inflation,” Powell said Friday. “Tariffs are highly likely to generate at least a temporary rise in inflation.”
Reacting to the markets, Treasury Secretary Scott Bessent told Tucker Carlson in an interview on Friday that “Wall Street’s done great. It can continue doing well.” But, he added, “it’s Main Street’s turn.”
“This is transformational for the American economy, for the American worker and for the new Republican alignment,” Bessent said. “I think this is the beginning of a process. We are going to reindustrialize. We have gone to a highly financialized economy — we have stopped making things, especially a lot of things that are relevant for national security.”
J.P. Morgan increased its assessment of the risk of recession this year to 60%, up from a 40% chance it had published just days prior. And the World Trade Organization warned of deep trouble to come if Trump refuses to change course.
“While the situation is rapidly evolving, our initial estimates suggest that these measures, coupled with those introduced since the beginning of the year, could lead to an overall contraction of around 1% in global merchandise trade volumes this year, representing a downward revision of nearly four percentage points from previous projections,” said Ngozi Okonjo-Iweala, director-general of the WTO. “I’m deeply concerned about this decline.”
Asked about the chances of a U.S. and global recession hitting this year, Senate Minority Leader Chuck Schumer, a Democrat from New York, said, “I’m very worried about it.”
“This is one of the most disastrous and poorly thought out policies that the Trump administration has done thus far, and that’s saying a lot,” he added.
Responding to the crisis, Sen. Charles E. Grassley (R-Iowa) partnered with Democratic Sen. Maria Cantwell from Washington state to introduce a bill that would require the president to submit new tariff policies to Congress for notification, review and approval.
“I’ve long expressed my view that Congress has delegated too much authority on trade to the executive branch under Republican & Democrat presidents,” Grassley wrote on X.
The bipartisan bill already has three additional Republican sponsors — Sens. Jerry Moran of Kansas, Lisa Murkowski of Alaska and Mitch McConnell of Kentucky. Other Republicans, including Trump supporter Sen. Thom Tillis of North Carolina, are expressing interest in the bill.
The Grassley-Cantwell bill marks the second time senators pushed back on Trump’s new import taxes in just a week. On Wednesday, in a rare rebuke of the president, the Senate passed a resolution Wednesday designed to thwart the imposition of tariffs on Canada.
Four Republicans — including Murkowski and McConnell — joined all Democrats in passing the resolution on a 51-48 vote.
Democratic leadership in the House of Representatives hopes the Grassley-Cantwell bill might have a path to passage in their chamber eventually, but one senior congressional aide said that leadership is doubtful anything will move in the short term.
“I don’t see it yet,” the aide said, granted anonymity to discuss internal deliberations, “but down the road, it’s possible.”
The White House said that its base tariff rate of 10% would go into effect at midnight Saturday, and that its country-specific duties would go into force Wednesday.
Trump, meanwhile, told investors on social media Friday, “MY POLICIES WILL NEVER CHANGE.”
But in a separate post, the president said he had discussed a deal with leadership in Vietnam — one of the nations hardest hit, with a 46% tariff rate — in a sign he is willing to negotiate over the policy.
Trump stated that Vietnam would be willing to cut its tariffs “down to ZERO” to strike an agreement with the United States. But Vietnam’s tariffs on the few U.S. goods it purchases are already low. Instead, the high rate imposed by the Trump administration on Vietnam actually targets the U.S. trade deficit with Vietnam — a capitalist result of U.S. consumers wanting to purchase more Vietnamese goods than the other way around.
As with other countries, such as Israel and Switzerland, which have no import duties on U.S. goods, it is unclear what will be required from each country for Trump to lower or eliminate rates. A consistent measure for success has not been articulated by the administration. To the contrary, senior aides to Trump have repeatedly referred to the 10% baseline tariff rate as a new normal.
Cambodia, hit with a 49% import tax, also asked Trump on Friday to postpone implementation of the new rate.
The president is in Florida golfing at his resort for the weekend.
Nike is cutting about 1,400 jobs in its operations division, mostly from its technology department, the company said Thursday.
In a note to employees, Venkatesh Alagirisamy, the chief operating officer of Nike, said that management was nearly done reorganizing the business for its turnaround plan, and that the goal was to operate with “more speed, simplicity and precision.”
“This is not a new direction,” Mr. Alagirisamy told employees. “It is the next phase of the work already underway.”
Nike, the world’s largest sportswear company, is trying to recover after missteps led to a prolonged sales slump, in which the brand leaned into lifestyle products and away from performance shoes and apparel. Elliott Hill, the chief executive, has worked to realign the company around sports and speed up product development to create more breakthrough innovations.
In March, Nike told investors that it expected sales to fall this year, with growth in North America offset by poor performance in Asia, where the brand is struggling to rejuvenate sales in China. Executives said at the time that more volatility brought on by the war in the Middle East and rising oil prices might continue to affect its business.
The reorganization has involved cuts across many parts of the organization, including at its headquarters in Beaverton, Ore. Nike slashed some corporate staff last year and eliminated nearly 800 jobs at distribution centers in January.
“You never want to have to go through any sort of layoffs, but to re-center the company, we’re doing some of that,” Mr. Hill said in an interview earlier this year.
Mr. Alagirisamy told employees that Nike was reshaping its technology team and centering employees at its headquarters and a tech center in Bengaluru, India. The layoffs will affect workers across North America, Europe and Asia.
The cuts will also affect staffing in Nike’s factories for Air, the company’s proprietary cushioning system. Employees who work on the supply chain for raw materials will also experience changes as staff is integrated into footwear and apparel teams.
Nike’s Converse brand, which has struggled for years to revive sales, will move some of its engineering resources closer to the factories they support, the company said.
Mr. Alagirisamy said the moves were necessary to optimize Nike’s supply chain, deploy technology faster and bolster relationships with suppliers.
A bill that would have required insurers to offer coverage to homeowners who take steps to reduce wildfire risk on their property died in the Legislature.
The Senate Insurance Committee on Monday voted down the measure, SB 1076, one of the most ambitious bills spurred by the devastating January 2025 wildfires.
The vote came despite fire victims and others rallying at the state Capitol in support of the measure, authored by state Sen. Sasha Renée Pérez (D-Pasadena), whose district includes the Eaton fire zone.
The Insurance Coverage for Fire-Safe Homes Act originally would have required insurers to offer and renew coverage for any home that meets wildfire-safety standards adopted by the insurance commissioner starting Jan. 1, 2028.
It also threatened insurers with a five-year ban from the sale of home or auto insurance if they did not comply, though it allowed for exceptions.
However, faced with strong opposition from the insurance industry, Pérez had agreed to amend the bill so it would have established community-wide pilot projects across the state to better understand the most effective way to limit property and insurance losses from wildfires.
Insurers would have had to offer four years of coverage to homeowners in successful pilot projects.
Denni Ritter, a vice president of the American Property Casualty Insurance Assn., told the committee that her trade group opposed the bill.
“While we appreciate the intent behind those conversations, those concepts do not remove our opposition, because they retain the same core flaw — substituting underwriting judgment and solvency safeguards with a statutory mandate to accept risk,” she said.
In voting against the bill Sen. Laura Richardson, (D-San Pedro), said: “Last I heard, in the United States, we don’t require any company to do anything. That’s the difference between capitalism and communism, frankly.”
The remarks against the measure prompted committee Chair Sen. Steve Padilla, (D-Chula Vista), to chastise committee members in opposition.
“I’m a little perturbed, and I’m a little disappointed, because you have someone who is trying to work with industry, who is trying to get facts and data,” he said.
Monday’s vote was the fourth time a bill that would have required insurers to offer coverage to so-called “fire hardened” homes failed in the Legislature since 2020, according to an analysis by insurance committee staff.
Fire hardening includes measures such as cutting back brush, installing fire resistant roofs and closing eaves to resist fire embers.
Pérez’s legislation was thought to have a better chance of passage because it followed the most catastrophic wildfires in U.S. history, which damaged or destroyed more than 18,000 structures and killed 31 people.
The bill was co-sponsored by the Los Angeles advocacy group Consumer Watchdog and Every Fire Survivor’s Network, a community group founded in Altadena after the fires formerly called the Eaton Fire Survivors Network.
But it also had broad support from groups such as the California Apartment Association, the California Nurses Association and California Environmental Voters.
Leading up to the fires, many insurers, citing heightened fire risk, had dropped policyholders in fire-prone neighorhoods. That forced them onto the California FAIR Plan, the state’s insurer of last resort, which offers limited but costly policies.
A Times analysis found that that in the Palisades and Eaton fire zones, the FAIR Plan’s rolls from 2020 to 2024 nearly doubled from 14,272 to 28,440. Mandating coverage has been seen as a way of reducing FAIR Plan enrollment.
“I’m disappointed this bill died in committee. Fire survivors deserved better,” Pérez said in a statement .
Also failing Monday in the committee was SB 982, a bill authored by Sen. Scott Wiener, (D-San Francisco). It would have authorized California’s attorney general to sue fossil fuel companies to recover losses from climate-induced disasters. It was opposed by the oil and gas industry.
Passing the committee were two other Pérez bills. SB 877 requires insurers to provide more transparency in the claims process. SB 878 imposes a penalty on insurers who don’t make claims payments on time.
Another bill, SB 1301, authored by insurance commissioner candidate Sen. Ben Allen, (D-Pacific Palisades), also passed. It protects policyholders from unexplained and abrupt policy non-renewals.
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Politicians in Washington and the reporters who cover them have an often adversarial relationship.
But on the last Saturday in April, they gather for an irreverent celebration of press freedom and the First Amendment at the Washington Hilton Hotel: The White House Correspondents’ Association dinner.
Hosted by the association, an organization that helps ensure access for media outlets covering the presidency, the dinner attracts Hollywood stars; politicians from both parties; and representatives of more than 100 networks, newspapers, magazines and wire services.
While The Times will have two reporters in the ballroom covering the event, the company no longer buys seats at the party, said Richard W. Stevenson, the Washington bureau chief. The decision goes back almost two decades; the last dinner The Times attended as an organization was in 2007.
“We made a judgment back then that the event had become too celebrity-focused and was undercutting our need to demonstrate to readers that we always seek to maintain a proper distance from the people we cover, many of whom attend as guests,” he said.
It’s a decision, he added, that “we have stuck by through both Republican and Democratic administrations, although we support the work of the White House Correspondents’ Association.”
Susan Wessling, The Times’s Standards editor, said the policy is a product of the organization’s desire to maintain editorial independence.
“We don’t want to leave readers with any questions about our independence and credibility by seeming to be overly friendly with people whose words and actions we need to report on,” she said.
The celebrity mentalist Oz Pearlman is headlining the evening, in lieu of the usual comedy set by the likes of Stephen Colbert and Hasan Minhaj, but all eyes will be on President Trump, who will make his first appearance at the dinner as president.
Mr. Trump has boycotted the event since 2011, when he was the butt of punchlines delivered by President Barack Obama and the talk show host Seth Meyers mocking his hair, his reality TV show and his preoccupation with the “birther” movement.
Last month, though, Mr. Trump, who has a contentious relationship with the media, announced his intention to attend this year’s dinner, where he will speak to a room full of the same reporters he often derides as “enemies of the people.”
Times reporters will be there to document the highs, the lows and the reactions in the room. A reporter for the Styles desk has also been assigned to cover the robust roster of after-parties around Washington.
Some off-duty reporters from The Times will also be present at this late-night circuit, though everyone remains cognizant of their roles, said Patrick Healy, The Times’s assistant managing editor for Standards and Trust.
“If they’re reporting, there’s a notebook or recorder out as usual,” he said. “If they’re not, they’re pros who know they’re always identifiable as Times journalists.”
For most of The Times’s reporters and editors, though, the evening will be experienced from home.
“The rest of us will be able to follow the coverage,” Mr. Stevenson said, “without having to don our tuxes or gowns.”
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