In a recent occurrence, former President Donald Trump took to a public platform to address escalating concerns. His economic approach, which seemed nebulous, particularly his wavering stance on tariffs, was considered by many to be steering the nation towards a financial meltdown. Last year’s presidential election furnished Trump with a second term, largely because of voters giving in to the apprehension surrounding the spiraling inflation and economic instability. Trump pledged to intervene on the first day of his administration to mitigate the escalating prices of basic commodities and services. Despite the vow, the figures keep heading north.
Tariffs, an economic instrument wielded heavily by Trump, act as taxes on goods imported into the country. These costs are typically borne by the businesses involved in importation who, consequentially, pass on these additional charges to the consumer, leading to an upsurge in the prices of these goods. The execution of such fiscal measures, however, was met with considerable opposition. As a result, Trump found himself compelled to retract his actions by allowing exceptions or indefinitely postponing the tariff implementation. This had been observed in cases like Canada and Mexico, both of which experienced such tariff delays twice since Trump assumed power.
In a comprehensive interview, Trump delved into the more precarious and volatile aspects of his presidential term, notably his financial strategies and the ensuing ambiguity that induced a large-scale liquidation in the share market within the past several weeks. On Thursday, the S&P 500 had a record low trading day of the year, exhibiting a drop of 1.8 percent, while the Nasdaq sank by 2.6 percent and the Dow Jones Industrial Average fell by 1 percent.
Aggregately, since February 10, the Dow Jones plunged by approximately 1,600 points, the Nasdaq by around 1,500 points, and the S&P 500 by nearly 300 points. Trump was insistent that the chaotic scenario was a legacy of former President Joe Biden’s ill-advised administration, compelling him to operate ‘at a very rapid pace’ to ‘make up for a lot of lost time’ since ‘the country was very poorly run for four years.’
When queried about the confusion resulting from his tariff policy within the business sector, Trump dismissed it, attributing it essentially to a media construct. He further hinted that tariffs ‘may go up,’ and elaborated, ‘I don’t think we’ll go down, but we may go up and, you know, they have plenty of clarity. They just use that. That’s like, almost a sound bite. They always say that we want clarity.’
When pressed about the escalating fears of an economic downturn, Trump evaded a direct response, stating, ‘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. And there are always periods of it takes a little time. I think it should be great for us.’ He added that he perceived his job as ‘building a tremendous foundation for the future,’ and cited the relocation of production to domestic soil by corporations such as Honda and Toyota as evidence of his policies reaping benefits.
U.S. Commerce Secretary Harry Lutnick, in his public appearance, boasted, ‘We’re going to see, over the next two years, the greatest set of growth coming from America as Americans. You saw at 1.3 trillion of new investments coming in America that, think of all those jobs, and remember, each trillion of investment in America is 1 percent of growth, GDP, so Donald Trump is bringing growth to America. I would never bet on recession. No chance.’ This sweeping claim seemed more romantic than the plausible reality.
Senator Rick Scott, a Florida-based Republican, declared on Sunday, ‘Donald Trump walked in with a crappy economy. The number of full-time jobs has been dropping almost the entire Biden administration. This is a lot of work. The manufacturing jobs are coming back, that had not been happening under Biden, that is a big deal. The number one thing is we’ve got to get American manufacturing back into this country. So, I’m very optimistic that we are going to get this done.’ The fervor for a fully domestic-centric economic model was apparent in his words, yet it was clear this wasn’t a universally held belief.
Representative Frank Pallone, a Democrat from New Jersey was of an opposing viewpoint, writing last week, ‘Trade wars kill the economy. We all should’ve learned this in history class. But Trump didn’t–now his reckless tariffs are tanking markets, driving up prices, and pushing us toward recession. Anyone? Anyone?’ Despite Pallone’s evident animosity towards tariffs and trade wars, it seemed like an overblown idea, considering Trump’s claimed direction of driving wealth back to America.
Former Democratic presidential candidate Andrew Yang chimed in to the conversation last week, stating, ‘Do I think Trump is leading us into a recession through his tariffs, posturing, and erratic leadership? Yes. Yes I do.’ Despite Yang’s accusations, the overemphasis on one leader’s actions as the cause for potential economic downturn was easily subject to criticism.
Regarding tariffs, goods from Canada and Mexico that meet the criteria of the United States–Mexico–Canada Agreement (USMCA) were reportedly exempted from Trump’s 25 percent tariffs until April 2. In the meantime, Trump planned to observe how the market responded to this policy reversal.