President Donald Trump and his allies have begun to suggest that some economic pain could be ahead for Americans as the administration plans to enter the US and slap tariffs on billions of dollars of goods and fire thousands of federal workers across the country.
In a speech to Congress this week, Trump warned Americans to expect “minor obstruction” from his plan to impose tariffs that would be wiped out on billions of dollars of goods. Treasury Secretary Scott Bescent said there will be a “detox period” as the economy moves away from government spending. And while Commerce Secretary Howard Lutnick said prices for some items would rise as a result of the tariffs, he said overall inflation would not increase.
Trump and top administration officials frame economic pain from policy as the short-term hit needed to improve the economy in the long run, but their comments go against the optimistic, first-fix rhetoric Trump unfolded in the advances of the campaign. Trump said in August that he would “end inflation and make America affordable again” on his first day in office, and he denied tariffs would raise consumer prices.
More strengthened comments from Trump and his cabinet come in mixed signs for the economy. The US added fewer jobs than was expected in February as federal cuts offset some of the benefits of employment from private employers. The unemployment rate rose slightly from 4.0% the previous month. Inventories across the main index were on track to finish the week lower.
“There’s going to be a bit of a hindrance, but we’re fine. That’s not too much,” Trump told Americans in a joint speech to Congress on Tuesday. “There’s going to be a bit of a hindrance, but we’re fine. That’s not too much.” Trump directly dealt with the impact farmers could feel from the retaliatory tariffs already placed on US produce, telling him that “probably they’ll have to endure with me again.”
In response to questions about Trump’s economic warning, White House spokesman Caroline Leavitt said Trump was “candid and honest.”
“The American people have been elected to bring monumental reform and change to this president,” Levitt said, “it takes a little confusion.” She added that the president “continued to be committed to ending the inflation nightmare caused by the Biden administration.
Since taking office, Trump has leaned tariffs on America’s closest trading partner, and is warning more in the future. This week, Trump increased tariffs by an additional 10% on all goods coming into the US from China, and increased tariffs by 25% on some goods from Mexico and Canada. Trump said he plans to announce broader tariffs on products from various countries starting April 2nd.
Customs duties are paid by US-based companies that import goods when the product arrives at the border. These companies can choose to either pass higher costs to consumers by increasing prices, reduce costs elsewhere, or absorb the fees by making less profits.
Voters show that 80% of respondents in the CBS polls hope that inflation should be the number one priority.
“I know if there is pain or not.”
In an interview with CNBC, Bessent said, “I know if there is pain or not,” but “adjustment” comes first.
“Can you see that this economy we inherited is beginning to roll a bit? Of course. And, look, as we move from public spending to private spending, there will be a natural adjustment,” Bescent said.
He called tariffs “one-time price adjustments.”
Companies including Target and Best Buy have warned of rising prices from Trump’s tariffs. Executives have denied that tariffs could lead to an increase in overall inflation that has been inscribed recently, but have admitted that consumer prices are high.
“There’s a short period of time when certain products get higher prices. It’s not inflation, it’s nonsense. In an interview with Fox News on Wednesday, Lutnick said, “It’s a short period of specific products.”
The economists also raised concerns about the federal move to fire thousands of workers. While the latest job numbers have shown only a small impact from previous shootings, the data shows that it’s not recently enough to capture all the cuts to date, and the administration still has a more clean layoff.
When asked Friday, Trump rejected the cuts affecting the labor market.
“I think the labor market will be great, but in contrast to government jobs, they will do well-paid manufacturing jobs,” Trump said. “There were too many people in the government.”
Lutnick said in an interview with CNBC on Thursday that tariffs will lead to more work by encouraging businesses to move production to the US.
However, he said that shifts do not necessarily translate into traditional manufacturing as production is becoming more and more successful with robots. Rather, it will lead to work in building new factories, maintaining robots, and managing facilities.
“The jobs that are created, the people who build those factories, the mechanics working on those robots, there are millions of jobs. These are great, paid jobs and you don’t need a university education to do that,” Lutnick said.
Congressional Republicans have also shown that some kind of pain could be ahead.
“It’s going to be resilient,” said Jason Smith (R-Mo.), chairman of the House Ways and Means committee. He said tariffs are a type of taxation. He said that is why Congress needs to pass tax reforms to reduce taxes on companies that make products in the United States.
“It’s definitely going to be a winner and a loser on the whole,” Smith said. “But we know you’re seeing a lot of storefronts that have been shut down due to other trade practices that have happened over the past few years. And the President believes that American workers, farmers and American manufacturers are treated fairly when it comes to trade.”
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