President Trump is leading us into a recession – Anthony Scaramucci

Former White House communications director and SkyBridge Capital founder Anthony Scaramucci does not see US President Donald Trump’s active trade tariffs as a solution to building up the economy but as a route to recession. In an interview with Yahoo Business executive editor Brian Sozzi, Scaramucci called the policy “very harmful.”

Scaramucci explained how the market “says” that tariffs function as a tax that primarily affects consumers. He described them as a form of consumption tax, similar to a value-added tax (VAT), and argued that they were regressive, disproportionately impacting lower-income individuals.

“So what ends up happening is the poor people, it eats up more of their disposable income than any other income group,” the American financier remarked.

Scaramucci: Trump tariffs will put us into a recession

Scaramucci told Sozzi that the tariffs are harmful and some trade agreements should be restructured to protect American workers. He further stated that Trump’s sweeping tariff policies were not the right approach. 

“I don’t think this sort of blanket approach is the right way to do it…And I think he’s going to put us into a recession, frankly.”

President Trump seems committed to his tariff-driven economic policy, although the White House recently walked back tariffs on Canada and Mexico, America’s closest trading partners. Still, the US leader insists that short-term economic turbulence is a necessary price for achieving long-term goals.

“There’ll be a little disturbance,” Trump reiterated during his address to Congress on Tuesday. “But we’re okay with that.”

Some observers have suggested that Trump’s trade threats are largely rhetorical, designed to project strength against competitors like China, not an attempt to make lasting economic restrictions.

Businessman and attorney Andrew Yang, a known supporter of the previous US administration, has joined the voices predicting an economic downturn due to Trump’s policies.

“Do I think Trump is leading us into a recession through his tariffs, posturing, and erratic leadership? Yes. Yes, I do,” Yang posted on X.

Trade wars with China, negotiations for Canada and Mexico

Trump’s trade battle with China has caused tariffs on Chinese imports to rise to at least 20%. The average effective tariff rate on imports from China now stands at approximately 34%, with some sectors, such as electric vehicles and steel, facing even steeper levies.

In contrast to the much-softened approach towards Canada and Mexico, the administration has been unrelenting about imposing more tariffs on Chinese goods, a policy that first appeared in Trump’s first term. 

Economists had predicted Trump might reverse course at the first signs of economic strain, but his supposed commitment to the trade war suggests otherwise.

Even though the US president negotiated a revised trade agreement with Mexico and Canada, a 25% tariff remains on goods that do not comply with the deal, meaning certain imports from both nations are still subject to significant taxes.

Equity investments will continue: more caution, not panic

According to David Booth, founder and chairman of Dimensional Fund Advisors, some long-term investors are still highly confident in the market. Booth told Yahoo Finance the current short-term fluctuations might look concerning, but they do not necessarily indicate the market is in a state of panic.

“What we have are clients that are really long-term investors,” Booth said. “Frequently, they call up and say, ‘Look, let’s chat, actually, you don’t need to talk to me. I know what you’re going to say. And I’m in this for the long haul.’”

Booth downplayed the connection between stock market performance and political leadership, propounding that markets operate on the basis of economic fundamentals rather than which party holds power.

“It’s always helpful to remind people how markets work. These are buyers and sellers coming together, and they don’t trade unless each side thinks they got a good deal,” Booth explained. “Every day, prices are getting set at levels that induce people to come in and invest.”

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