U.S. President Donald Trump declined to say whether the U.S. economy is facing a recession or price increase as his administration’s tariff threats on some of its closest trading partners triggered the tariff threat.
When asked if he was looking forward to this year’s recession, Trump said there was a “transition period”.
But Commerce Secretary Howard Lutnick insists that the world’s largest economy will not cause contractions, while acknowledging that prices for certain commodities may rise.
This is after a turbulent week in the U.S. financial markets, with investors experiencing uncertainty over the government’s turnaround on certain key parts of its aggressive trade policy.
New Tit-Tat tariffs from China, targeting some U.S. agricultural products, came into effect on Monday.
Trump interviewed Fox News in an interview Sunday, but during recording Thursday, he answered a question about the recession: “I hate to predict something like this. It’s a transition period because we’re doing a lot. We bring wealth back to the United States. It’s a big deal.”
“It takes a little time, but I think it should be great for us,” Trump added.
Last week, the U.S. imposed a new 25% tax on imports from Mexico and Canada, but then exempted many goods only two days later.
Trump will also double the blanket tariffs from Chinese goods to 20%. In response, Beijing announced a retaliation tax on certain imported agricultural commodities from the United States.
He accused China, Mexico and Canada of not enough actions to end illegal drugs and immigration into the United States. The three countries rejected the allegations.
Stocks on Wall Street have fallen since Trump sparked a trade war with his top U.S. trading partners.
Investors are worried that tariffs will lead to higher prices and ultimately weaken growth in the world’s largest economy.
“Foreign goods may become more expensive. But American goods will become cheaper,” Lutnick said on NBC.
But when asked whether the U.S. economy can face a recession, Lutnick said: “It is definitely not… there will be no recession in the United States.”
