Delaware economist Robert Fry warns that President Trump’s tariffs on Canada and Mexico could trigger a recession in the U.S. Despite the president’s claims of job growth and financial gains, economists argue that the tariffs will not support their intended sectors and may lead to increased prices and decreased production. Fry emphasizes the risks associated with prolonged tariffs on major trading partners.
Delaware’s leading economist, Robert Fry, has warned that President Trump’s tariffs on Canada and Mexico could potentially lead to a recession in the United States. During a recent address to Congress, President Trump reiterated his stance on tariffs, claiming, “Other countries have used tariffs against us for decades, and now it’s our turn to start using them against those other countries.” He announced a 25% tariff on both Canada and Mexico, in addition to a 10% tariff on China, leading to a sharp decline in the stock market.
The economic reaction was immediate, with prices rising and inflation remaining high, prompting criticism from Democratic leaders and uncertainty among Republicans. Senator Chris Coons expressed his concerns stating, “Trump promised again last night to make America affordable again. But this isn’t going to help make it more affordable.” Meanwhile, Republican Representative Ryan Mackenzie urged for a more measured approach and hoped for negotiations to alleviate tensions created by the tariffs.
Trump’s broader tariff strategy aims to implement reciprocal tariffs with all trading partners effective April 2, claiming it would bring in “trillions” of dollars and promote job growth. However, Fry cautioned that such tariffs would not achieve their intended economic benefits, stating, “It’s not going to spur the economy, and it’s not going to help the sector of the economy it’s intended to help.” He further elaborated that history has shown America has generally distanced itself from high tariffs since World War II.
While Fry acknowledged a potential justification for tariffs against China, he expressed greater concern regarding those on Canada and Mexico, emphasizing the significant amount of trade between the U.S. and its neighbors. Fry warned, “I think if the tariffs on Canada and Mexico stay in effect for more than a few weeks, I think we have a recession.” Following Trump’s announcement, Canadian leaders swiftly indicated plans for retaliatory measures, while Mexico is expected to respond soon.
Even after a phone conversation between Trump and Canadian Prime Minister Justin Trudeau, a temporary pause on auto tariffs was announced, but the majority of tariffs remain intact. Trump himself alluded to potential impacts on Americans, noting, “There will be a little disturbance, but we’re OK with that.” Fry concluded with a stark warning about the repercussions of persistent tariffs, stating, “If the tariffs go into effect and stay in effect, prices are going to go up, auto production is going to go down. It’s going to hurt.”
In summary, the tariffs announced by President Trump on Canada, Mexico, and China have significant implications for the U.S. economy. While the administration believes these measures will foster job growth and generate revenue, economists like Robert Fry warn of a looming recession should these tariffs remain in place. The trade relationships with neighboring countries are critical for the American economy, and any sustained tariffs could lead to increased prices, diminished auto production, and adverse economic effects.
Original Source: www.cbsnews.com
