Washington: While declining to rule out a potential recession, US President Donald Trump has described the nation’s financial situation as a “period of transition” despite mounting instability in the global markets.
The Republican President’s remarks came amidst the US participating in an aggravating commercial litigation with key partners, including China, Mexico and Canada.
During a pre-recorded Fox News interview, Trump was asked about the risk of an economy downturn, to which he responded, “I hate to predict things like that. There is a period of transition because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing.”
The US-China trade war has intensified with Beijing imposing retaliatory tariffs on American agricultural products, including chicken, beef, pork, wheat, and soybeans, ranging between 10 to 15%. Last week, the US imposed new 25% tariffs on imports from Mexico and Canada but then exempted many of those goods just two days later, according to a report by BBC.
Trump also doubled a blanket tariff on goods from China to 20%. In response, Beijing announced retaliatory taxes on some imports of agricultural goods from the US.
Han Shen Lin, China country director at consultancy firm The Asia Group, commented on the escalating trade tensions, stating that while both nations appear unwilling to yield, China is now prioritising domestic economic growth over exports.
Meanwhile, financial markets have reacted negatively, with Wall Street experiencing volatility due to investor concerns over rising prices and potential economic slowdowns. Analysts fear higher tariffs could stifle growth in the world’s largest economy.
US Commerce Secretary Howard Lutnick said, “Foreign goods may get a little more expensive. But American goods are going to get cheaper”.
Conversely, investment strategist Rachel Winter cautioned that Trump’s aggressive tariffs policies would inevitably lead to inflation, stated, “Tariffs are theoretically inflationary and the level of tariffs that Trump is imposing, I think no doubt, will have to cause inflation somewhere down the line.”
Former US Commerce Department official, Frank Lavin, told the BBC that he thinks the trade war is unlikely to escalate out of control.
Tariffs will eventually “fade a bit” but still be an “extra burden on the US economy,” he said.
UNI
