US President Donald Trump has placed tariffs on steel and aluminum imported from every country, sparking global economic uncertainty and recession fears. The move could drive up prices on consumer and industrial goods for Americans.
European countries have retaliated against the US tariffs, adding pressure to various American industries. Wall Street is growing nervous about the potential damage Trump’s policies could inflict on America’s economy. Stocks have plummeted, with the Nasdaq falling into correction territory.
Trump has been given multiple escape routes from his tariff policy, but it seems he cannot help himself. His advisors and economic brain trust have warned that tariffs would make his position more difficult and drive up prices.
Simon Johnson, a professor of global economics at MIT, said, “If he keeps going in this direction, prices will rise and the economy will slow even further.” Art Hogan, chief market strategist at B. Riley Wealth Management, expressed concern that investors are worried about an own-goal – a manufactured economic slowdown.
The tariffs could also inflict significant harm on businesses and consumers, ironic for a president who campaigned on promising to lower prices. Scott Lincicome, vice president of general economics at the Cato Institute’s Stiefel Trade Policy Center, said, “For anyone who voted for Donald Trump on his promise to lower prices, it’s going to be a shock and potentially infuriating.”
However, some argue that Trump’s trade policy could shock the economy into addressing America’s persistent inflation crisis. Speaker of the House Mike Johnson defended Trump’s policies as necessary to start the process of repairing and restoring the American economy.
The threat of tariffs has already spooked consumers, with retailers warning of a potential consumer pullback due to economic uncertainty caused by Trump’s tariff threats. The S&P 500 retail index reached a 52-week low on Tuesday.
Goldman Sachs increased its recession chances to one-in-five, and Former US Treasury Secretary Larry Summers warned that the tariffs are a “self-inflicted wound” to the US economy.
Source: https://edition.cnn.com/2025/03/12/economy/recession-tariff-trump/index.html