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Donald Trump has declined to rule out either a recession or higher inflation while dismissing the concerns of business over a lack of clarity on tariffs, after a tumultuous week in which he watered down elements of his aggressive trade agenda.
The president insisted industry had “plenty of clarity” and lashed out at “soundbite(s)” from companies expressing confusion over his plans.
“They always say that — that’s like almost a soundbite — they always say that: ‘we want clarity’,” Trump said in an interview aired on Fox News on Sunday.
“It sounds good to say, but for years, the globalists, the big globalists, have been ripping off the United States. They’ve been taking money away from the United States, and all we’re doing is getting some of it back.”
The president declined to rule out a recession hitting the US economy this year after the Atlanta Fed warned of an economic contraction in the first quarter of the year.
“I hate to predict things like that. There is a period of transition, because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing, and there are always periods, it takes a little time.”
Asked whether tariffs could fuel inflation again, Trump said: “You may get it. In the meantime, guess what? Interest rates are down.”
The comments come after a week of about-turns and an equity market sell-off as markets scrambled for clarity over Trump’s brewing trade war and companies warned of rising prices.
The president imposed 25 per cent tariffs across the board on imports from Canada and Mexico on Tuesday before backtracking later in the week.
On Wednesday he granted carmakers a carve-out from the levies and on Thursday extended that to all goods that met the rules of the 2020 USMCA free-trade deal. Separate 25 per cent tariffs on steel and aluminium imports are set to take effect this week.
The levies have already caused significant upheaval in the market as companies stockpile materials, review operations and prepare to raise prices. Trump reiterated that the tariffs could rise in future.
“The tariffs could go up as time goes by. They may go up, I don’t know if it’s predictability,” he said.
Trump said in the interview that he had “wanted to help the American carmakers” this week but insisted that no such leeway would be shown on reciprocal tariffs set to be imposed next month.
“I gave them a little bit of a break for a short period of time . . . It’s a transition into April, and after that I’m not doing this . . . I told them, I said: Look, I’m going to do it this one time but, after that, I’m not doing it.”
Separately on Sunday, Howard Lutnick, Trump’s commerce secretary, conceded some of the tariffs would cause inflationary pressures, echoing Trump’s warnings of “a little disturbance” when he addressed Congress on Tuesday.
“So, will there be distortions? Of course, foreign goods may get a little more expensive, but American goods are going to get cheaper.,” Lutnick told NBC’s meet the press.
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