Trump Declares US Economy in 'Transition' Amid Escalating Trade War

As the trade war heats up, President Trump describes the US economy as undergoing a "transition," amid concerns and uncertainties fueled by new tariffs. While Commerce Secretary Lutnick rules out recession fears, investors remain wary of rising prices and potential economic impact.

US President Donald Trump recently addressed the state of the economy amidst escalating trade tensions with countries such as China, Mexico, and Canada. In an interview aired on Fox News, Trump stated that the US economy is in a "period of transition," but refrained from making predictions about a possible recession or price increases.

While the Commerce Secretary Howard Lutnick asserted that the US economy would not confront a contraction, he admitted that the prices of certain goods might rise due to the current trade policies. This week is pivotal as new tariffs from China targeting US agricultural products are set to take effect, increasing pressures on the already fluctuating financial markets.

Trump's comments come after a tumultuous period marked by his administration's shifting stance on tariffs. Just last week, steep 25% tariffs were imposed on imports from Mexico and Canada but many were later exempted within days. Additionally, Trump raised tariffs on Chinese goods to 20%, prompting retaliatory actions from Beijing impacting US agricultural imports.

The President has attributed these policy maneuvers to larger efforts to bring wealth back to America, despite the negative sentiment among investors who worry that escalating tariffs could impede the economy's growth. Lutnick's reassurances that foreign goods may see a price hike while American goods could become cheaper have done little to quell investor anxieties.

In the wake of these developments, Wall Street stocks have faced downward pressure, and Trump's trade war continues to ignite debate over its implications for the US economy and consumer prices.