US President Donald Trump does not rule out the entry of the US economy in a recession this year, noting that his comprehensive economic agenda may lead to short -term unrest, but he believes that it will lead to prosperity in the future.
A transitional stage or the beginning of a crisis?
In an interview with Fox News, on Sunday, Trump answered when he asked whether he expected an economic recession this year, “I hate prediction of such matters, there is a transitional period because what we do is very big.”
According to the newspaper “Wall Street Journal”, Trump continues to implement radical changes in the American economy by imposing new customs definitions, migration restrictions, tax reducing and organizations, as well as reducing government jobs.
Although some companies welcome these reforms, the uncertainty about the customs duties imposed on Mexico and Canada disturbed the financial markets, especially with the frequent decline in the implementation of some of these definitions.
Despite strong growth and low unemployment, the signs of economic pressure began to appear, as consumer spending has decreased and concerns about inflation increased.
While Wall Street has witnessed a bullish wave in late 2024 due to the optimism of investors towards the Trump agenda, financial markets have declined in recent weeks.
With the closure of trading on Friday, the “Dow Jones”, Standard & Poor’s 500 and “Nasdak” indicators recorded lower levels than it was when Trump was installed on January 20, 2025.
In a move that reflects the fluctuation of Trump’s commercial policies, his administration stopped last week by customs tariffs by 25% on cars and spare parts coming from Mexico and Canada only 48 hours after they entered into force.
Reducing the decline
During the interview, Trump escaped clear assurances to companies looking for clarity on customs tariffs, saying only, “I think that, but the definitions can rise over time.”
He added that he no longer focuses on the performance of the stock market as it was in its first term, saying, “What matters to me is building a strong country, you can not only monitor the stock market, if you look at China has a 100 -year perspective.”
In other statements to reporters on Sunday, Trump defended the customs duties policy, saying, “This will be the greatest step we have ever made as a country.”
“A period of addiction to addiction”
In turn, Treasury Secretary Scott Besent acknowledged that the American economy may face a difficult stage as a result of new economic policies.
“The market and the economy are addicted to this government spending, and we will go through a period of eliminating addiction,” Bessent said in an interview with CNBC.
He pointed out that the definitions may lead to a temporary increase in prices, but they will not cause sustainable inflation.
While Trade Minister Howard Lootnick confirmed that he does not see any recession on the horizon, but the ambiguity surrounds the path of the American economy, and Trump himself did not rule out the idea, as he said when he was asked about that, “Of course, hesitate, who knows?”
The question remains open: Are we facing a transient economic turmoil? Or is the American economy moving towards an inevitable stagnation?
