The risk of tariff-led recission sent US markets into a nosedive after US President Donald Trump threatened to slap Canada with 50% tariff on aluminium and steel, and then backtrack on this threat, after Canada suspended its electricity surcharge on the US.
The situation shook markets that were already nervous about the global metal tariffs starting at midnight. It showed a chaotic and unpredictable environment as tariff threats continued to confuse investors and business leaders over the past six weeks.
Major stock indexes had dropped about 10% from their highs, with growing worries that the US economy could be slowing down, reported CNBCTV18. Trump added to the recession fears during a Fox News interview on Sunday, saying he wasn’t ruling it out.
When asked on Sunday whether the US will enter a period of recession this year, Trump said that he “hates to predict things like that”. He told the Fox News interviewer that this can be considered as a period of transition because what US is doing now quite big and that they’re “bringing wealth back to America”. “It takes a little time,” he added.
When Trump’s commerce secretary, Howard Lutnick, was asked if people in the US should be prepared for an economic shutdown, he replied, “absolutely not”.
Trump on late Tuesday, sounded more optimistic when asked if he was concerned about an economic downturn. Trump said that he doesn’t see recession happening at all and that he thinks that America is going to boom. He also didn’t react much on the markets slump too. They’re “going to go up and they’re going to go down,” Trump said, adding that it didn’t concern him.
Trump also said that the biggest win was not the tariffs, but the big win would be a lot of money and also if the businesses move into America and produce.
So far, US’ main tariff targets have been China, Mexico, and Canada, which are also the country’s biggest trade partners.