Washington: As the US and the world grapple with the economic tumult caused by his sweeping tariffs, President Donald Trump remains adamant that his strategy will pay off. 'BE COOL! Everything is going to work out well. The USA will be bigger and better than ever before!' he posted on social media on Wednesday, as the global trade war that has battered markets escalated with China, the EU, and other nations unveiling their countermeasures against the US.
According to Anadolu Agency, several prominent analysts rejected the notion that the US economy or stock market is poised for a rebound, warning instead of a possible recession and widespread economic instability. 'It is hard to envision any circumstances where stock markets would 'boom' any time in the near future,' said Eugene White, an economics professor at Rutgers University and research associate at the National Bureau of Economic Research (NBER).
White highlighted the disruption of global supply chains and the spike in input costs, compounded by immigration policies affecting labor markets in agriculture, manufacturing, and services. Drawing historical parallels, he noted that after the 1929 Wall Street crash, US stock markets did not recover until the mid-1950s.
Aris Protopapadakis, an associate professor emeritus of finance and business economics at the USC Marshall School of Business, echoed those concerns, suggesting that the markets may stabilize but not experience a dramatic rebound. He emphasized the necessity of political intervention, suggesting that pressure from Republicans running for reelection might prompt Trump to alter his course.
Willem Thorbecke, a senior fellow at Japan's Research Institute of Economy, Trade and Industry (RIETI), remarked on the unlikely improvement of corporate earnings under Trump's tariff regime. He argued that tariffs favor inefficient producers, which may lead to greater losses in US profitability compared to any gains.
The analysts collectively warned of an unsound economic environment, overshadowed by the Federal Reserve's growing concerns about inflation driven by tariffs, potentially necessitating tighter monetary policy. Until these conditions change, a stock market recovery remains uncertain.