Economist Warns Of Major Economic Impact From Trump's Tariff Policies

According to Odaily, Boston College economics professor Brian Bethune has stated that U.S. President Donald Trump's tariff policies represent the most significant shock to the U.S. economy since the 1930 Smoot-Hawley Tariff Act. Economists widely believe that the act exacerbated the Great Depression by encouraging countries to erect trade barriers, leading to a sharp decline in global economic activity. In response to the Trump administration's actions, Canada has announced retaliatory tariffs, and Mexico plans to unveil countermeasures on Sunday. Bethune warns that the new tariffs will disrupt supply chains and pose challenges for U.S. manufacturers operating internationally. The immediate effects of the tariffs are expected to suppress growth and increase inflation, creating a 'stagflation effect.' The U.S. experienced stagflation in the 1970s and 1980s, characterized by stagnant economic growth and high inflation. Bethune suggests that the Federal Reserve should consider cutting interest rates to address the current situation.