A Nobel Prize-winning economist warns that President Trump’s trade policies are nudging the United States closer to a recession. James Heckman, an economics professor at the University of Chicago, argues that fears surrounding tariffs and their unpredictable enforcement are instilling a recessionary mindset in the economy. His forewarnings highlight a growing concern amongst economists regarding the fluctuations in the stock market driven by these tariffs.
Heckman, who received the Nobel Memorial Prize in Economics in 2000, notes it is premature to conclude that Trump’s tariff policies have irreparably harmed America’s trading relationships. However, he suggests that while a recession isn’t guaranteed, the likelihood increases by 2025 due to further uncertainties stemming from the administration’s agenda.
As the administration prepares to unveil fresh tariffs alongside existing measures on steel and aluminium, the specifics remain obscured, including which nations will be affected. Trump had indicated that tariffs might apply to all countries, but conversations from the Treasury Secretary introduced the notion of targeting select nations imposing substantial tariffs on U.S. imports.
In light of upcoming measures, Commerce Secretary Howard Lutnick confidently asserted that a recession should not be expected, praising Trump’s potential impact on America. Conversely, Former IMF Chief Economist Simon Johnson cautioned that the inconsistency in messaging about tariffs is adversely affecting investment and contributing to economic slowdown.
Looking ahead, a significant speech on tariffs from Trump is scheduled for the White House Rose Garden on Wednesday, which is anticipated to shed more light on the administration’s plans regarding trade policies, ensuring the nation remains in a contemplative sway regarding its economic future.
James Heckman, a Nobel Prize-winning economist, warns that Trump’s trade policies are leading the US towards a recession due to tariff-induced uncertainties. These fluctuations have caused stock market instability and concern among economists. Although some in the administration maintain that a recession is unlikely, experts caution that the current unpredictability could lead to economic slowdown, with Trump set to announce new tariffs soon.
The warning from Nobel laureate James Heckman underscores the potential risks associated with President Trump’s trade policies, indicating they could lead to an economic downturn. While some in the administration assert a robust economy will prevail, others caution against the damaging uncertainty created by fluctuating tariffs. As the administration prepares to announce new tariffs, the economic landscape remains tenuous, teetering on the edge of potential recession.
Original Source: www.newsweek.com
