CFP
AsianFin -- U.S. President Donald Trump has declined to confirm whether he anticipates his proposed tariffs and the resulting economic uncertainty could push the United States into a recession this year. His response contradicted the stance of his own Commerce Secretary, who had assured Americans that a recession was impossible.
In a pre-recorded interview aired on Fox News' Sunday Morning Futures, Trump told host Maria Bartiromo that his plans for expanded "reciprocal" tariffs would take effect on April 2. The White House had previously imposed 25% tariffs on imports from Mexico and Canada but quickly paused them, leaving Wall Street unsettled amid fears of a potential trade war.
When questioned about the Atlanta Federal Reserve's warning of an economic slowdown in the first quarter of the year—marked by reduced production of goods and services—Trump seemed to acknowledge that his tariffs could affect the nation's economic growth. However, despite asserting that the tariffs would ultimately benefit the U.S., he avoided directly addressing whether a recession might occur this year, as several major banks have warned.
"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," Trump said. "And there are always periods of—it takes a little time, it takes a little time. But I think it should be great for us. I mean, I think it should be great. It's gonna be great ultimately for the farmers."
Trump's remarks stood in contrast to those of Commerce Secretary Howard Lutnick, who, in an interview aired the same day, insisted that Americans should "absolutely not" prepare for a recession.
"Anybody who bets against Donald Trump—it's like the same people who thought Donald Trump wasn't a winner a year ago," Lutnick said on NBC News. "Donald Trump is a winner. He's going to win for the American people; that's just the way it's going to be. There's going to be no recession in America."
Notably, Lutnick appeared unaware of Trump's earlier comments about a potential economic downturn.
"We'll unleash America out to the world, grow our economy in a way we've never grown before. You are going to see over the next two years the greatest set of growth coming from America as Americans," Lutnick continued. "You saw it—$1.3 trillion of new investment coming into America. Think of all those jobs, and remember, each trillion of investment in America is 1% of GDP growth."
"So Donald Trump is bringing growth to America," he added. "I would never bet on a recession—no chance."
On Monday, equities, Treasury yields, and the dollar all fell as growing concerns about the health of the US economy dampened investors' appetite for risk.
Asian shares dropped, while equity futures for the S&P 500 and the tech-heavy Nasdaq 100 declined by as much as 1.1%. Treasury yields slipped across all maturities as investors flocked to the safety of fixed-income assets.
The move toward safer investments boosted the yen and the Swiss franc, while a gauge of the dollar fell for the sixth consecutive day—its longest losing streak in a year—as confidence in the US economy's continued outperformance waned.
