U.S. President Trump suggests likelihood of recession, yet remains optimistic about future economic recovery
In a jaw-dropping interview with NBC, President Donald Trump brushed off economic worries, asserting that even a temporary recession would be just a bump in the road, with glowing economic times ahead.
When probed by "Meet the Press" host Kristen Welker about acceptability of a short-term recession for long-term benefits, Trump remained unphased, breezily stating, "It's all good. This is a transition period. I think we'll do great things."
Welker pressed him on his concerns about a recession, to which Trump responded, "No," and followed it up by saying, "Anything can happen, but I believe we'll have the best economy in the history of our country."
These comments were made as Wall Street analysts expressed mounting apprehensions about a potential recession due to recent trade policy changes by Trump.
During the interview at his Mar-a-Lago resort in Florida, Trump challenged the Wall Street concerns, saying, "Why don't you talk about those who say we'll have the best economy ever?"
Preliminary data released by the Commerce Department on Wednesday showed the American economy contracting by 0.3% in the first quarter of 2025, primarily due to a decrease in exports and an increase in imports ahead of Trump's announced tariffs.
At a meeting with his cabinet, Trump dismissed any accountability for the negative GDP data, blaming it squarely on his predecessor, Joe Biden. "Probably you've seen the data today," Trump said. "Let me start by saying: it's Biden's fault."
Since the beginning of his second term in January, Trump has been championing tariffs against major U.S. trading partners like Canada, Mexico, and China. Earlier this month, he wavered, suspending the introduction of new, heavier tariffs on most countries for 90 days. This reversal boosted markets, which had initially suffered losses. However, Trump has inexorably raised tariffs on China to 145%.
Despite the potential impact these tariffs could have on prices and consumer goods availability, Trump has continued to brush aside such concerns, stating, "Someone said: 'Oh, the shelves will be empty.' Well, maybe kids will have two dolls instead of thirty, you know? And maybe those two dolls will cost a few dollars more than usual."
In essence, President Trump's aggressive use of tariffs carries significant economic ramifications. Economic forecasts, such as those from the Wharton Budget Model, predict a potential long-run GDP reduction by about 6%. This reduction translates to a considerable economic contraction, raising the specter of a recession. Moreover, wages could decrease by around 5%, diminishing consumer purchasing power and economic activity further. Middle-income households are projected to suffer significant lifetime losses, estimated at approximately $22,000, potentially reducing consumer spending and exacerbating economic downturns.
Critics argue that Trump's tariff policies could reignite inflation, contribute to a contraction in economic activity, and slow global economic growth. The International Monetary Fund suggests that Trump's tariffs could reduce global economic growth by 0.5% through next year. Economists have also warned of a potential U.S. recession due to the impact of the tariffs, among other factors, as the combination of reduced economic growth, inflation risks, and global economic slowdowns heighten the risks of a recession.
- The economic benefits Trump believes will result from a temporary recession were questioned by reporters during an interview with NBC's Kristen Welker, where he was asked about the acceptability of a short-term recession for long-term benefits.
- In the midst of mounting concerns about a potential recession due to his trade policy changes, Trump showed no worry and instead remained confident in the future prosperity of the economy.
- Trump's policy-and-legislation focused on imposing tariffs has been a hot topic in politics, with critics arguing that it could reignite inflation, slow global economic growth, and even contribute to a U.S. recession.
- Forecasts indicate that Trump's tariff policies could lead to a long-run GDP reduction of about 6%, raising the possibility of a recession and potential significant lifetime losses for middle-income households, which could further exacerbate economic downturns.
