Trump Suggests Tariffs Could Lead To Recession

For the first time, President Donald Trump suggested that his aggressive tariffs on key trade partners could lead to a recession. 

In an interview aired Sunday, Trump told Fox News host Maria Bartiromo that while the economy was in a “transition period,” he believed his policies would ultimately benefit the country. Bartiromo asked Trump for clarity regarding reciprocal tariffs, to which he responded, “We may go up with some tariffs. It depends. We may go up. I don’t think we’ll go down, or we may go up.” 

>READ MORE: TRUMP ADMITS TARIFFS MAY WORSEN INFLATION

His recent tariffs on Canada, Mexico and China have sparked a backlash from various industries, with automakers warning of severe economic consequences. In response, Canada imposed retaliatory tariffs on $20.5 billion worth of U.S. exports, while China has introduced its own countermeasures and plans further action.

Trump’s administration is set to introduce a 25% tariff on foreign steel and aluminum this week, with additional tariffs expected on April 2 as part of his “reciprocal tariffs” plan. Trump defended these measures, arguing that the U.S. has been “ripped off for decades” and that his policies are necessary to restore economic fairness.

Economists, however, have expressed growing alarm over the uncertainty created by Trump’s tariff strategy. Some fear the resulting instability will discourage business investments and hiring, potentially worsening an economic slowdown. 

Commerce Secretary Howard Lutnick dismissed recession concerns, claiming that tariffs would fuel economic growth. He claimed that while foreign goods may become more expensive, domestic products would see lower prices, benefiting American consumers. However, many economists argue that tariffs often allow U.S. businesses to raise prices without competition, potentially burdening consumers instead. 

Financial institutions like JP Morgan and Goldman Sachs have raised the probability of a recession in the next 12 months, but Lutnick remained confident. “I would never bet on a recession. No chance,” he said. “Foreign goods may get a little more expensive. But American goods are going to get cheaper, and you’re going to be helping Americans by buying American.”