Experts Say Tariff Pause Fails to Eliminate Global Recession Risk Amidst Trade Uncertainty

Economic experts have expressed concerns that the risk of a global recession persists, despite the recent 90-day delay in implementing aggressive tariff increases by the United States. This pause, announced after market turmoil and widespread criticism, has not fully alleviated the economic risks.

One expert, who had written a study cited by the Trump administration to justify the tariffs, believes the president's actions may be too late to reverse the damage. The uncertainty created by these policies is detrimental to global value chains and hinders economic stability. Clear and predictable policies are essential for businesses and households to make informed decisions and foster economic growth.

Even if the high tariffs are not reintroduced, the global economic risk remains until the president alters his trade strategy or Congress limits his authority in this area. The president's unpredictable behavior has created lasting consequences, as he has demonstrated a willingness to change his stance on trade issues.

While the pause on major tariffs has slightly reduced the risk of a global recession, the impact is less significant than one might expect. The United States still maintains some of the highest tariffs globally, even with the delay.

The constant shifts in trade policy have also made financial markets nervous, as evidenced by the decline in the US bond market. The uncertainty surrounding tariffs has already had a negative impact on spending and economies. The risk of a global recession remains high until there is more clarity on tariffs in the long term.

The ongoing trade war between China and the US will have broader consequences, and the longer it continues, the more people elsewhere will feel its negative effects. The trade relationship between the US and China is significantly strained, making it more expensive for companies in both countries to trade with each other. Ultimately, consumers may bear the extra costs, potentially leading to reduced spending.