WEST PALM BEACH, Fla. — President Donald Trump is dismissing business concerns over the uncertainty caused by his planned tariffs on a range of American trading partners and the prospect of higher prices, and isn’t ruling out the possibility of a recession this year.
After imposing and then quickly pausing 25% tariffs on imports from Mexico and Canada that sent markets tumbling over concerns of a trade war, Trump said his plans for broader “reciprocal” tariffs will go into effect April 2, raising them to match what other countries assess.
“April 2nd, it becomes all reciprocal,” he said in a taped interview with Fox News Channel’s “Sunday Morning Futures.” “What they charge us, we charge them.”
Asked about the Atlanta Fed’s warning of an economic contraction in the first quarter of the year, Trump seemingly acknowledged that his plans could affect U.S. growth. Still, he claimed, it would ultimately be “great for us.”
In response to the question of whether he was expecting a recession in 2025, Trump 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.” He then added, “It takes a little time. It takes a little time.”
On Wall Street, it was a tough week with wild swings dominated by worries about the economy and uncertainty about what Trump’s tariffs.
Trump brushed aside concerns from businesses seeking stability as they make investment decisions. He said that “for years the globalists, the big globalists have been ripping off the United States” and that now, “all we’re doing is getting some of it back, and we’re going to treat our country fairly.”
“You know, the tariffs could go up as time goes by, and they may go up and, you know, I don’t know if it’s predictability,” the Republican president said.
Trump last week lifted the Mexico and Canada tariffs on American car manufacturers, and then virtually all imports to the U.S., but kept them on goods from China.
More tariffs are coming this week, with Commerce Secretary Howard Lutnick telling NBC’s “Meet the Press” that 25% tariffs on steel and aluminum imports will take effect Wednesday. Lutnick said Trump’s threatened tariffs on Canadian dairy and lumber though would wait until April.
“Will there be distortions? Of course,” Lutnick 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.”
Since January, the economic policy uncertainty index has spiked 41% to a level, 334.5, that in the past signaled a recession. Nicholas Bloom, a Stanford University economist and co-developer of the uncertainty index, said it’s unclear how this will play out, but he’s worried.
“I have an increasing fear we will enter into what may become known as the ‘Trump recession,'” he said. “Ongoing policy turbulence and a tariff war could tip the U.S. economy into its first recession in five years.” That last recession occurred under Trump because of the coronavirus pandemic.