1. Trump’s proposed tariffs on imports could have recessionary effects on the US economy.
2. Rogoff believes that both Trump and Biden are the most protectionist presidential candidates in a while.
3. Both candidates are likely to further stoke the national debt through increased spending.
Top economist Kenneth Rogoff has warned that Donald Trump’s proposed tariffs on imports could have “recessionary” effects on the US economy and potentially lead to higher inflation. Trump’s plan includes implementing a 10% base tariff on all US imports and tariffs of over 60% on Chinese goods. Rogoff compared Trump’s protectionist policies to Joe Biden’s Inflation Reduction Act, labeling them both as the most protectionist candidates the US has seen in a while.
According to Rogoff, implementing a 10% tariff could push up inflation and interest rates, causing disruptions and potentially a recession in the economy. Additionally, raising tariffs on foreign goods increases the risk of retaliation from other countries, potentially sparking a trade war with China and other partners. This could hinder economic growth and stoke inflation, making Trump a major threat to the global economy, as suggested by economist Nouriel Roubini.
Both Trump and Biden are expected to further increase the national debt through continued high levels of spending. Rogoff noted that Washington’s lax attitude towards debt could have negative consequences, with concerns about the rapid pace of government spending mounting. This spending, which has been increasing the national debt by $1 trillion every 100 days, creates economic instability and worries economists about the future of the US economy.
In light of these factors, Rogoff predicts another volatile year ahead for the US economy, citing potential risks such as higher interest rates, overspending by Congress, and economic shifts in countries like China and Japan. He urges policymakers to address these issues in order to avoid further economic turmoil.