From the moment President Donald Trump unveiled his sweeping tariffs Wednesday through the ensuing market mayhem the following day, Treasury Secretary Scott Bessent’s phone lit up with text messages from executives tied to his former industry.

Multiple hedge fund managers and finance executives reached out, seeking his help in swaying Trump on the levies, according to people familiar with the matter. After all, as the former chief investment officer of Soros Fund Management, Bessent was a potential ally. He was seen as someone who could explain to the president that extreme new levies would damage the economy and continue to wreak havoc on markets.

But, in fact, Bessent wasn’t the primary driver of the tariff announcement, according to a person familiar with the matter. He used his role in Oval Office meetings to lay out potential scenarios for markets and the economy based on different tariff levels, the person said.

The tariffs were largely shaped by a small group within Trump’s inner circle, with critical decisions about the duties’ structure going down to the wire before the president’s announcement. A Treasury spokesperson declined to comment.

Now, Trump’s bid to remake the US economy and boost made-in-America products is at odds with a Wall Street establishment that has profited for decades from the idea that international trade drives the world order. And even some Republican lawmakers are sounding the alarm. 

For the past two days at least, the market carnage that Wall Street feared has come to pass, wiping out $5.4 trillion in value and dragging down the S&P 500 to the lowest level in 11 months. Recession fears are growing around the globe. And executives who had rallied behind the Trump administration’s promises to cut taxes and ease regulation are now contending with an economic agenda that stands to roil their businesses.

Private equity firms are calling off initial public offerings and tempering expectations of a deal comeback that they hoped would help juice fundraising. Hedge funds are weighing whether Trump’s next move is too unpredictable to even wager on. Bank leaders who had forecast a more pro-growth agenda are having to peel back expectations, with JPMorgan Chase & Co. economists predicting a US recession this year.

The market plunge has even caused some of Trump’s most ardent backers in the political world to predict broader fallout: Texas Senator Ted Cruz said tariffs everywhere “would destroy jobs here at home and do real damage to the US economy.” On his podcast, he warned the levies make Republicans vulnerable to a “bloodbath” in 2026 midterms elections.

Trump — who in his first administration paid close attention to the stock market’s performance — has shown that he won’t be easily persuaded to change course by the tariff-induced plunge. He said Friday that the policy will remain and that large corporations are unconcerned by the tariff plan. As markets slid the most in five years, the president was at his West Palm Beach golf club.

Within the administration, the market fallout has caused nervousness, and officials will be eyeing whether the market fallout extends into a third session on Monday. Yet there’s a sense that any shift in policy would have to come from the president alone. And Trump is focused on the long term with tariffs, a person familiar with the matter said. He has stressed the need to revive the US manufacturing base, secure supply chains and reduce reliance on rivals.

“The only special interest guiding President Trump’s decisions is the interest of the American people,” White House spokesman Kush Desai said. “The entire administration is aligned on addressing the national emergency that President Trump has rightfully identified is posed by our country running regular trade deficits.”

Tariff Roll Out 

A Trump adviser who isn’t part of the administration criticized how the levies were rolled out and the White House’s communication strategy as markets were crashing. It should have had teams of economists, business leaders and union workers explaining the plan on TV, this person said.

In the weeks leading up to the tariff announcement, some Wall Street executives had already started to appeal to the Treasury secretary for help. Others went public with their warnings. Citadel founder Ken Griffin repeatedly criticized planned tariffs, saying they would dull the US’s competitive edge, while Warren Buffett called tariffs “an act of war, to some degree.”

Bessent remains a key member of Trump’s economic team, according to an administration official. But senior counselor Peter Navarro and Commerce Secretary Howard Lutnick dominated the president’s attention on tariffs, said a person close to the matter. US Trade Representative Jamieson Greer was also an integral part of the team.

Bessent, in an interview with Bloomberg Television after the tariffs were announced Wednesday, said he wasn’t a part of negotiations with other countries and has been focused on the administration’s tax agenda. 

Private equity firms had seen Trump’s arrival heralding the return of IPOs that had been largely dormant the past three years and looser strictures on attracting wealthy individuals as clients. Instead, this week left them scrambling to determine how portfolio companies would be affected by the tariffs and are nursing painful stock slides. Shares of Apollo and KKR & Co. notched the biggest two-day slumps in their history.

Dealmakers note that some sectors — like domestic manufacturing — could still be poised for big boosts under the Trump administration. But they have expressed concerns to acquaintances that prolonged uncertainty and a slumping market will make it harder to exit bets at the prices they hoped. Already, companies including Klarna Group Plc and StubHub Holdings Inc. have paused their IPOs.

They’ve avoided airing their views publicly for fear of drawing the president’s wrath, and instead are trying to backchannel their concerns through proxies and lobbyists instead.

There are signs of some pushback among Trump loyalists on Capitol Hill as well. Senator Chuck Grassley and three other Republicans co-sponsored a bipartisan bill that intends to bring back tariff power to Congress, requiring approval of most new tariffs within 60 days. Majority Leader John Thune, who ultimately has the power to decide whether to bring the bill up for a floor vote, said he plans to look at the legislation.

“I know there is some interest in it,” Thune said on Friday. He acknowledged that the party was watching Wall Street carefully, and said he hoped they would see results from Trump’s plan “fairly quickly.”

Meanwhile on Saturday — as traders and executives across Wall Street and corporate America were still reeling from the market mayhem — White House aides issued an announcement: Trump had won the second round of the Senior Golf Championship at his Jupiter, Florida club.

He’d be advancing to the championship on Sunday.

This story was originally featured on Fortune.com

It’s a real trade war now. 

Beijing responded to Donald Trump’s “Liberation Day” tariffs on Friday, slapping its own 34% tariffs on all U.S. imports, matching the new so-called reciprocal tax rate imposed by the U.S. president on Wednesday. The tariffs come into effect on April 10, one day after Trump’s tariffs.  

The news shook an already spooked U.S. market, sending the S&P 500 almost 6% lower on Friday. Boeing—which once supplied a third of its 737 planes to China—dropped by over 9%. U.S.-listed Chinese companies also performed poorly, with the NASDAQ Golden Dragon China Index dropping by around 9%.

The collapse in U.S. markets followed continued declines in Asia, which bore the brunt of Trump’s “Liberation Day” tariffs. Japan’s benchmark Nikkei 225 index is now down by 5.2% in the two trading days since April 2. South Korea’s KOSPI is down by 1.6% over the same period. India’s NIFTY 50 fell by 1.8%. (Perhaps fortunately, Chinese markets, including in Hong Kong, were closed for Qingming Festival, or “Tomb Sweeping Day”)

Yet beyond the market reactions, China’s retaliation raises the possibility that Trump’s tariffs—despite the claims by his supporters that countries would either adjust to the new taxes, or hurry to the negotiating table to offer concessions—will send the world into an extended period of protectionism.

“Rather than fixing the rules that some U.S. trading partners took advantage of to their own benefit, Trump has chosen to blow up the system governing international trade,” Eswar Prasad, senior professor of trade policy at Cornell University, says. “He has taken the hatchet to trade with practically every major U.S. trading partner, sparing few allies or rivals.”

And now, the world faces a trading system without a clear leader. Some countries will try to offer concessions to the U.S., others will try to build new trading links with other economies—and some are now seeing an opportunity to leverage relatively lower tariff rates to take market share from competitors. 

“The era of rules-based globalization and free trade is over. We’re entering a new phase, one that is more arbitrary, protectionist, and dangerous,” Singapore Prime Minister Lawrence Wong said in a video statement released Friday.

“Global institutions are getting weaker; international norms are eroding. More and more countries will act based on narrow self-interest and use force or pressure to get their way.”

How bad an effect will tariffs have?

The Trump administration imposed broad tariffs, often far above the 10% baseline, across the Asia-Pacific region. Southeast Asia was hardest hit, with Cambodia and Vietnam getting 49% and 46% tariffs respectively. China got a 34% tariff, on top of previously announced 20% tariffs. Other East Asian economies, like South Korea, Taiwan and Japan, got tariffs of between 24% to 32%. Only a handful in the Asia-Pacific—Australia, New Zealand, and Singapore—got the 10% baseline. 

Goldman Sachs on Thursday downgraded GDP forecasts across Asia-Pacific, with Vietnam getting the biggest hit, dropping to 5.6%, a full 1.5 percentage points lower than its previous projection. Taiwan, which got a 32% tariff, also took a big hit in the bank’s forecasts, dropping a percentage point down to 1.6%. 

HSBC estimated that 54% tariffs on China—the current level imposed by Trump—could drag China’s GDP growth down by 1.5 percentage points, down from its earlier projection of 4.8%. 

Analysts don’t expect other Asia-Pacific countries to copy China in trying to counter Trump’s tariffs. 

“Most other countries will resist the urge to escalate,” says James Laurenceson, director of the Australia-China Relations Institute at the University of Technology Sydney. “Most countries in Asia remain of the view that open trade is good for prosperity and also security.”

He adds that “the mood in Australia is one of disappointment, but if the U.S. wants to engage in self-harm, the best strategy isn’t to respond by engaging in self-harm too.” (Australia has said it won’t retaliate to Trump’s new 10% tariff).

“South Korea will likely offer more concessions,” such as participating in gas projects in Alaska or buying more U.S. agricultural products, suggests Ramon Pacheco Pardo, an international relations expert and Korea expert at King’s College London. 

On Friday, U.S. President Trump claimed that Vietnamese officials had offered to “cut their tariffs down to zero.” The Southeast Asian countries had previously offered to cut duties on U.S. imports. Cambodia has also offered to cut tariffs on a range of imports to 5%, according to local outlet The Khmer Times. 

Economies may also offer domestic support, like Taiwan’s announcement of $2.7 billion in aid for local manufacturers hurt by Trump tariffs. 

But the U.S. probably won’t be able to restore itself to economic primacy in the region, suggests Van Jackson, a senior lecturer in international relations at Victoria University of Wellington and author of The Rivalry Peril: How Great-Power Competition Threatens Peace and Weakens Democracy. “The U.S. has gradually alienated itself from Asian economic realities. America, in other words, doesn’t have the cards to do what it’s trying to do,” he says.

What happens when no one is leading trade?

For decades, the U.S. was at the center of the so-called rules-based trading system, supporting institutions like the World Trade Organization and leveraging its massive consumer market. While the U.S. commitment to free trade was never quite as strong as its rhetoric suggested, “Liberation Day”, by rocketing duties up to a level not seen since the 1930 Smoot-Hawley tariffs, has now clearly left the world trading system without a leader.

“What the U.S. is doing now is not reform. It is abandoning the entire system it had created,” Singapore’s prime minister said Friday. 

That could be risky. “A world where the hegemon abandons obligations of international order maintenance and is just in pure power- and wealth-hoarding mode is a danger to itself and others,” Jackson says.

Fault lines are already starting to be drawn.

The Philippines, which got a relatively lenient 17% tariff hit, sees “Liberation Day” as an opportunity to win market share from its neighbors. The Southeast Asian country is eager to boost its exports of chips, electronics and coconuts to the U.S. “We will definitely take advantage of the lower tariffs,” trade minister Cristina Roque said in a Bloomberg TV interview on Friday morning. “Now that our tariffs are lower than [competitors like Thailand], we will probably have a stronger edge.” 

Another possibility is that Asia builds new trading relationships, whether internally or with other developed markets in Europe or the Middle East. 

“Faced with both restricted access to U.S. markets and weaker U.S. consumer demand on account of the Trump tariffs, the rest of the world will look to export market diversification, trade arrangements that exclude the United States, and other approaches to buffer themselves against a looming global trade war,” Prasad suggests. 

That’s true in China, already trying to build its links with the Global South. Beijing is “encouraging more companies to go overseas” which can lead to a “strong short-term boost for exports,” says Dan Wang, a director on Eurasia Group’s China team. “As soon as you establish factories overseas, they have to import machinery to set those factories up.”

Economists have previously expressed worries about a tariff cascade in response to a potential flood of Chinese goods.

Still, Wang thinks that there won’t be a “universal pushback” to China’s goods. She suggests that “pillar industries” like autos or green energy might spur “strong pushback” from foreign governments. But in the end, “China is a major producer. It supplies goods that cannot really be replaced by another country, or even a combination of other countries.”

And Beijing may win some kudos by being a relative bastion of stability, at least compared to Trump.

“In the short term, China can reap low-hanging public relations fruit and collect easy wins by appearing stable, reliable, and simply by not doing what the U.S. is doing,” says Austin Strange, an international relations professor at the University of Hong Kong. 

This story was originally featured on Fortune.com

The European Union’s response to US tariffs could include regulating the use of data by American big tech groups, France’s finance minister said in an interview with the JDD newspaper.

“We have several tools at our disposal at the European level: regulatory, fiscal, customs,” Eric Lombard said in the interview published late Saturday. “For example, we can strengthen certain environmental requirements or regulate the use of data by certain digital players,” he added.

President Donald Trump announced on April 2 broad tariffs on imports into the US, including 20% duties on EU goods, as part of his efforts to shake up the global trading system. The bloc — the US’s largest trading partner — has vowed to retaliate with countermeasures if needed, including with its own tariffs, taxing services and targeting American tech firms. 

Lombard said EU rules also allow for taxes on certain American activities, with all the options remaining open and under discussion. He didn’t detail how data usage by big tech groups could be strengthened. Data collection and processing is already regulated by EU rules like the far-reaching GDPR.

Read More: France Eyes US Big Tech in EU Retaliation to Trump’s Tariffs 

The European response to US tariffs should “inevitably” have “consequences” for both the continent’s and US companies, Lombard said. “It is not a question of taxing all American imports, that would be counterproductive, penalizing our economy as much as theirs,” he told the newspaper. “So we are going to target certain industrial segments, in a precise manner.”

Lombard stressed that he still sees a possibility for tariffs to be lifted through negotiations. “If we reach a balanced agreement within a reasonable time frame, it will be a confidence factor” for French companies and households, he said.

This story was originally featured on Fortune.com

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