Delaware economist Robert Fry warns that President Trump’s newly announced tariffs on Canada and Mexico could lead to a recession. While Trump argues these tariffs will benefit the economy by fostering job growth and revenue, critics assert they may harm consumers by increasing prices and stifling production.
In a recent address, President Trump reaffirmed his commitment to implement tariffs on major trading partners, specifically announcing a 25% tariff on Canada and Mexico and a 10% tariff on China. This decision has raised concerns among both economists and politicians, predicting negative implications for the U.S. economy.
The stock market experienced a decline following the announcement, although some recovery was observed afterward. Critics, including Senator Chris Coons from Delaware, argue that these tariffs could exacerbate economic burdens on consumers as prices for goods continue to rise. Meanwhile, some Republicans are cautiously awaiting to observe the tariffs’ long-term effects.
President Trump has asserted that the tariffs would generate substantial revenue and foster job growth, claiming that they will encourage companies to relocate to the United States. However, Delaware-based economist Robert Fry has challenged this perspective, arguing that the tariffs will not benefit the manufacturing sector as intended.
Fry noted that, historically, the U.S. has avoided high tariffs since World War II, with free trade principles advocated since Adam Smith’s time. He shared concerns specifically regarding prolonged tariffs on Canada and Mexico, stating that if they persist, the U.S. could face a recession.
The potential retaliatory measures by Canada and Mexico complicate the situation, as both countries rely heavily on trade with the U.S. President Trump suggested that his tariffs aim to compel neighboring nations to take action against fentanyl trafficking. Recently, he and Canadian Prime Minister Justin Trudeau agreed to pause auto tariffs for a month, but the remaining tariffs still pose risks to the economy.
Despite the brief halt, economists warn that if tariffs remain long-term, consumer prices will increase, auto production may decline, and the overall economic health of the country could suffer significantly. Fry highlighted the need for immediate resolution to avoid severe economic repercussions.
In conclusion, President Trump’s tariffs on Canada and Mexico could lead to significant economic challenges for the United States, potentially resulting in a recession if they are sustained. While the administration believes the tariffs will enhance job creation and revenue, economists like Robert Fry predict adverse effects on manufacturing and consumer prices, emphasizing the risks associated with retaliatory responses from trading partners. The situation demands careful monitoring and an expedited resolution to mitigate detrimental impacts on the economy.
Original Source: www.cbsnews.com
