White House Denies Tariff Pause As Trump's Trade Policy Roils Global Markets

Reports suggesting that U.S. President Donald Trump was considering a 90-day pause in tariffs for all countries except China caused volatility in global financial markets on Monday. While the news temporarily lifted U.S. stock indices, the White House quickly denied the claim, calling it "false" and "fake news," according to CNBC. The clarification reversed the gains in the markets and reignited concerns about the economic impact of Trump's aggressive trade policy.

Global markets reacted sharply to Trump's tariff plans. Asian and European shares suffered significant losses, and oil prices also declined. Investors grew increasingly nervous that the widening tariff regime could lead to global economic instability. Trump, in recent comments, defended his stance, comparing the tariffs to medicine necessary to fix deeper economic issues. "Foreign governments will have to pay a lot of money to remove the levies," he warned.

In the United States, the benchmark 30-share BSE Sensex plunged by 2,226.79 points, or 2.95 percent, closing at 73,137.90. At its lowest point during the session, the index dropped 3,939.68 points, or 5.22 percent, to 71,425.01. Meanwhile, European markets also fell, with some indices dropping up to 6 percent.

Goldman Sachs raised its estimate of the probability of a U.S. recession within the next year to 45 percent, citing rising risks linked to the tariffs. JPMorgan economists revised their forecast for the U.S. economy from 1.3 percent growth to a 0.3 percent contraction. Robert Pavlik, a senior portfolio manager at Dakota Wealth Management in Connecticut, summed up investor sentiment: "People are afraid the worst is yet to come. They're worried about a market crash, and what follows - a recession domestically and then globally, potentially leading to a depression."

Despite the market concerns, Trump remained firm in his position. Returning from a weekend in Florida, he told reporters aboard Air Force One, "Sometimes you have to take medicine to fix something." He also urged the U.S. Federal Reserve to cut interest rates. "Don't be Weak! Don't be Stupid!" he posted on social media, adding that the country now had the opportunity to do what should have been done decades ago.

White House officials backed Trump's tough stance. Peter Navarro, the administration's trade adviser, dismissed recession fears as "silly," while National Economic Council Director Kevin Hassett said Trump was open to "really great deals" that benefit American industries and workers.

Internationally, reactions ranged from concern to attempts at engagement. European Commission President Ursula von der Leyen reiterated the EU's offer of zero tariffs on industrial goods, while warning against escalating tensions. Germany's Volkswagen Group, affected by the new 25 percent auto tariffs, is holding back vehicle deliveries at U.S. ports. Aircraft parts supplier Howmet Aerospace also hinted at shipment halts if affected by the duties.

In Asia, countries are signaling openness to negotiations. Taiwan's President Lai Ching-te offered a zero-tariff framework for talks. An Indian official said New Delhi had no current plans to retaliate. Japan's Prime Minister Shigeru Ishiba reportedly spoke with Trump and is planning a visit to Washington to discuss trade relations.

Meanwhile, investors are now betting on the likelihood that the U.S. Federal Reserve may respond to the rising recession risks by cutting interest rates as early as next month.