President Donald Trump did not deny there could be a recession this year under his leadership, telling Fox News there would be a “period of transition” as his economic policies take effect, as the president’s rapidly shifting tariffs on goods from Mexico and Canada have rattled the stock market and led to warnings of an economic downturn.
Key Takeaways
- “Sunday Morning Futures” host Maria Bartiromo asked Trump whether he expected there would be a recession this year, to which Trump responded, “I hate to predict things like that.”
- “There is a period of transition, because what we’re doing is very big,” Trump said about implementing his economic agenda like tariffs, adding, “It takes a little time, but I think [his agenda] should be great for us.”
- The president also downplayed the stock market dropping over the past week in response to his tariffs, telling Bartiromo the market hadn’t gone down by “much” and saying he “can’t really watch the stock market” as he implements his economic policies, adding, “You can’t go by that, you have to do what’s right.”
- Economists upped the odds of a recession this week and cited Trump’s economic policies as the “key risk” that could cause one, amid troubling indicators like lower consumer sentiment, mounting layoffs and the stock market’s decline, with the Federal Reserve Bank of Atlanta projecting March 6 that the U.S.’ economic output will contract by an annualized rate of -2.4% in 2025’s first quarter.
- The stock market also suffered its worst week in six months amid uncertainty over Trump’s tariffs, with Nvidia and Tesla having the biggest declines.
What To Watch For
Trump is expected to implement more tariffs this week, as Commerce Secretary Howard Lutnick told “Meet the Press” on Sunday that tariffs on imports of steel and aluminum will take effect Wednesday.
Trump is also planning to implement reciprocal tariffs on foreign goods—meaning the U.S. will tax a nation’s imports at the same rate they tax U.S. exports—starting April 2. The president suggested the frequent flip-flops in his tariff policies could continue, telling Bartiromo the tariff rates he’s announced “won’t go down, but we may go up.”
When Bartiromo asked whether companies can expect more predictability from Trump’s economic agenda, the president demurred, saying, “Well I think so, but you know, the tariffs could go up as time goes by.”
Contra
Lutnick downplayed fears of a recession much more than Trump on “Meet the Press” on Sunday, saying right before Trump’s Fox interview aired, “There’s going to be no recession in America.” “Donald Trump is bringing growth to America. I would never bet on a recession. No chance,” Lutnick said, after responding, “Absolutely not,” when asked if Americans should brace for a recession.
What Is A Recession?
The National Bureau of Economic Research broadly defines a recession as a “significant decline in economic activity that is spread across the economy and lasts more than a few months,” though more specific definitions of the term say a recession happens when there’s negative growth in the nation’s gross domestic product for at least two consecutive quarters.
Where Do Trump’s Tariffs Stand Now?
Trump on Tuesday imposed 25% tariffs on imported goods from Canada and Mexico, as well as higher tariffs on China, only to later pull back on those fees. He paused tariffs on auto imports from Canada and Mexico for one month and temporarily exempted all goods that are covered under the U.S.’ free trade agreement with Mexico and Canada until April 2. In addition to planned reciprocal tariffs and taxing imports of steel and aluminum, Trump has also suggested he could still impose higher tariffs on Canadian lumber and dairy.
Key Background
Trump’s tariffs are a centerpiece of his economic agenda, but have been sharply criticized by economists, who have long warned his tariffs will raise prices for American consumers and could ultimately harm the nation’s economy. Some companies including Best Buy and Target suggested they were planning to raise prices as a result of Trump’s tariffs taking effect, sparking further criticism of the tariffs’ impacts on Americans.
Trump repeatedly claimed before the election that his tariffs would only harm foreign countries and not raise prices, but he and his administration’s top officials have more recently acknowledged the policy could lead to higher prices—while insisting the temporary increase is necessary to achieve longer-term economic goals.
Treasury Secretary Scott Bessent told CNBC on Friday the economy could need to have a “detox period,” after saying Thursday the American dream was not primarily about “access to cheap goods,” while Lutnick acknowledged to “Meet the Press” that foreign goods may get “more expensive” as the tariffs are implemented. Trump said in his speech to Congress on Tuesday that his tariffs will cause “a little disturbance, but we are OK with that.”
Look back on the week that was with hand-picked articles from Australia and around the world. Sign up to the Forbes Australia newsletter here or become a member here.
