- The Trump administration is implementing reciprocal tariffs starting April 2.
- Despite Commerce Secretary Lutnick's claim that there will 'absolutely not' be a recession, major financial institutions have increased their recession probability forecasts as stock markets recently experienced significant declines.
- Multiple foreign manufacturers across automotive, electronics and consumer goods sectors are considering relocating production to the United States.
President Donald Trump discussed tariffs, delays and the possibility of a recession with Fox Business host Maria Bartiromo, in a segment that aired Friday.
As reciprocal tariffs are scheduled to go in effect on April 2, Goldman Sachs recently raised its 15% prediction of a recession in the next year to 20%, and J.P. Morgan raised its 25% prediction to 35%, per Reuters.
When Bartiromo brought these predictions up to Trump, he responded, “I hate to predict things like that.”
“There is a period of transition, because what we’re doing is very big,” he said. “We’re bringing wealth back to America. That’s a big thing, and there are always periods of — it takes a little time. It takes a little time, but I think it should be great for us.”
Commerce secretary says there will be ‘no recession’
In an interview with “Meet the Press” on Sunday, Commerce Secretary Howard Lutnick said the Canada and Mexico tariffs are a direct result of Trump trying to crack down on fentanyl trafficking into the United States.
NBC anchor Kristen Welker asked Lutnick if the tariffs will be permanent.
“If fentanyl ends, I think these will come off,” Lutnick responded. “But if fentanyl does not end, or he’s uncertain about it, these will stay this way until he is comfortable.”
Lutnick said to count on 25% tariffs on steel and aluminum imports going live on Wednesday and 250% tariffs on dairy and lumber from Canada following shortly. On April 2, Lutnick confirmed reciprocal tariffs will go into place.
Target and Best Buy warned Trump’s tariffs on Mexico and Canada will cause American consumer prices to increase. Lutnick responded to the companies' concerns, Sunday, saying, “Yes, some products are going to be more expensive that are made foreign, but American products will get cheaper.”
When asked if Americans should expect to see prices drop, Lutnick responded that prices should begin to come down starting April 2.
Lutnick added that there will “absolutely not” be a recession in the next year. Instead, the Commerce secretary suggested that Trump’s reciprocal tariffs going into effect on April 2 will simply even the playing field between the U.S. and other countries.
“We’ll unleash America out to the world and grow economy in a way that’s never been done before,” he said.
Stock markets take a hit after Trump’s recession comments
The S&P 500 slid over 2.5%, Monday, and Nasdaq slid 4%, following three weeks of selling. Monday’s slide marks the market’s lowest point since September.
Tesla’s stock took the biggest hit of the tech companies in the Nasdaq, falling over 12%, per The Wall Street Journal. Apple (-6.09%), Microsoft (-3.34%), Google (-4.80%), Meta (-5.36%) and Nvidia (-5.38%) all took a hit as well.
Andrew Brenner, the head of international fixed income at National Alliance Securities, blamed both foreign and domestic uncertainties around Trump’s tariffs for the stock slide since Jan. 20.
“The markets are scared of the uncertainty that the tariff rhetoric is bringing,” he told The New York Times.
However, Federal Reserve Chairman Jerome Powell struck a more positive tone when he spoke with the Times on Friday. “Despite elevated levels of uncertainty, the U.S. economy continues to be in a good place,” he said.
Powell added that sentiment data has “not been a good predictor of consumption growth in recent years.”
These are the foreign companies talking about U.S. manufacturing relocation
According to a White House press release, at least five car manufacturers, several electronics and consumer goods companies and one liquor producer is planning on moving to the U.S. to avoid tariffs.
Automotive moves include:
- Honda — Civic hybrid production to move to Indiana.
- Hyundai Motor — Vehicle production to move to Georgia.
- Stellantis — Pickup truck production to move to Illinois.
- Volkswagen — Considering American Audi and Porsche production sites.
- Volvo Cars — Considering moving some production.
Electronics and consumer goods moves include:
- LG Electronics — South Korean company considering refrigerator manufacturing to move to Tennessee.
- Samsung Electronics — South Korean company considering dryer manufacturing to move to South Carolina.
- Compal Electronics — Taiwanese laptop maker considering production to move to Texas.
- Inventec — Taiwanese AI company considering tab chip production to move to Texas.
- Essity — Swedish hygiene product company considering production move to U.S..
- LVMH — French luxury goods company which owns Louis Vuitton, Christian Dior and Sephora considering production move to U.S.