Economist Warns: Tariffs Threaten U.S. Jobs, Recession Risks Grow

New Delhi (The Uttam Hindu): The tariff policies adopted by US President Donald Trump have increased the risk of a global trade war, due to which a recession is expected in the US. Paul Gruenwald, global chief economist of S&P Global Ratings, believes that the uncertainty created by the White House's frequent changes on tariffs has led to a delay in business investment and a tendency to reduce consumer spending. Apart from this, the imposition of tariffs has also put jobs in danger in the US.

“I think most of the objectives are worthwhile, but the way they are being implemented is extremely haphazard,” Gruenwald said. He added that if firms and consumers reduce their spending and demand falls, a recession could ensue — a recession that could be largely avoided.

When Trump came to power in January, he saw the US economy on solid ground, while the economy has registered more strength during the Biden administration. Recession is an economic situation in which the gross domestic product (GDP) of a country falls for two consecutive quarters (6 months). In a recession, there is a decline in GDP, increase in unemployment, reduction in consumer spending, decrease in investment, decrease in corporate profits and a continuous decline in the stock market.

Tariff on steel and aluminum imports

Trump has imposed a hefty tariff of 25% on steel and aluminum imported into the US. For the first time since Trump's re-election, high tariffs have also been imposed on the European Union.