National Economic Council director Kevin Hassett warned of more economic uncertainty stemming from Trump’s unfolding tariff agenda. However, Hassett predicted that the tariff challenge would be solved after April 2nd, the date Trump says his administration will enforce proposed tariffs.
According to Hassett, tariffs will be imposed on countries that either have their own duties or that have certain non-tariff trade barriers on U.S. products. Trump has continued to ramp up his tariffs strategy, allowing duties on steel and aluminum to come into effect — and incurring retaliatory tariffs — while threatening higher levies on Canadian goods and bringing new tariff warnings for European wine and champagne imports.
Ed Stack, the chairman of Dick’s Sporting Goods, echoed Hassett’s sentiments saying it was ‘just a bit of an uncertain world out there right now’. The National Federation of Independent Businesses (NFIB) reported last week that its uncertainty index climbed to its second-highest recorded reading last month.
NFIB chief economist Bill Dunkelberg observed that uncertainty was high and rising on Main Street, ‘and for many reasons’. The number of small businesses expecting better business conditions in the next six months dropped, and the percentage viewing the current period as a good time to expand also fell.
Hassett says uncertainty over Trump’s tariffs will last until April
Hassett: “On April 2, you’re gonna see the reciprocal tariffs … between now and April 2, there will be some uncertainty.” pic.twitter.com/7IU8id1UVZ
Hassett is convinced that there will be ‘some uncertainty’ related to Trump’s tariffs between now and April 2nd. His remark acknowledged what many analysts and business leaders had complained about for weeks as Trump’s sweeping tariff announcements–and subsequent revisions to them–sowed confusion in the markets.
However, he defended Trump’s use of tariffs and tariff threats against Mexico, Canada and China, saying these tariffs were originally intended to pressure Mexico to step up immigration enforcement at the U.S. border and to coerce all three countries into doing more to limit illicit fentanyl trafficking into the United States.
According to CNN, Wall Street was nervous about the damage Trump’s policies could inflict on America’s still-strong but increasingly wobbly economy. Stocks have plunged, with the Nasdaq falling into correction by 10% (from its recent high) and the S&P 500 hovering over the same territory.
“But yeah, absolutely between now and April 2, there’ll be some uncertainty…But as April comes along, markets will see that the reciprocal trade policy makes a great deal of sense.”
-Kevin Hassett
Trump has continued to shrug off calls for more clarity about his policies despite being a vocal supporter of tariffs, even though they have stoked market volatility. However, Bank of America Global Research analysts noted that ‘confusion remained the name of the game, delaying investment decisions and affecting consumer confidence’. They added that the longer this regime continued, the more likely negative effects on business and consumer confidence would also persist.
Johnson says Trump might not be able to pull himself out of the tariff threat
Simon Johnson, professor of global economics and management at MIT, said Trump was in a tight spot, and every tariff (or threatened tariff) made his position more difficult. Johnson believes that prices will rise and the economy will slow even further if Trump keeps going in this direction.
According to CNN, complying with the USMCA was another problem. Many goods were not considered USMCA complaints because, until recently, a slew of Canadian and Mexican goods, including computers, phones, and petroleum, were not subject to any US tariffs.
The USMCA established a free trade zone in North America for the vast majority of products crossing the borders of the United States, Mexico and Canada. However, it did not make sense for companies to go the extra mile to ensure compliance with the treaty if their products did not have a tariff before the USMCA and predecessor NAFTA treaties.
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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