Former White House communications director and SkyBridge Capital founder Anthony Scaramucci isn’t buying President Donald Trump’s trade tariffs as an economic booster. Instead, in a chat with Yahoo Business executive editor Brian Sozzi, Scaramucci called them “very harmful,” suggesting they’re paving the way for a recession.

Scaramucci explained that the market views tariffs as a tax, primarily burdening everyday consumers. To put it simply, he said they’re like a consumption tax, similar to a VAT, and unfortunately, they disproportionately hurt those with lower incomes.

“Put simply,” the American financier pointed out, “it’s lower-income families who feel the pinch most, as tariffs eat up a larger chunk of their disposable income compared to any other group.“

Scaramucci: Trump tariffs will put us into a recession

Scaramucci elaborated to Sozzi, reiterating that tariffs are damaging. He suggested that while some trade deals need a revamp to protect American workers, Trump’s blanket tariff approach is misguided.

“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,” he stated plainly.

Tariffs UP.
Groceries UP.
Exports DOWN.
Stock market DOWN.
Consumer confidence DOWN.
Chance of a recession UP UP UP.

After Trump left, it took Biden 4 years to rebuild the US economy.

It’s taken Trump just 6 weeks to destroy it again.

— Tristan Snell (@TristanSnell) March 4, 2025

President Trump remains committed to his tariff-centered economic policy, even after the White House recently eased up on tariffs for Canada and Mexico, America’s closest allies in trade. The US leader insists that any short-term economic pain is simply the price to pay for bigger gains down the road.

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

Some think Trump’s trade threats are mostly for show—rhetoric intended to project strength against competitors like China, rather than a serious move towards permanent economic restrictions.

Adding to the chorus of concern is businessman and attorney Andrew Yang, a known supporter of the prior US administration, who has also voiced his prediction of an economic downturn sparked by 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 shared definitively in a post on X.

Trade wars with China, negotiations for Canada and Mexico

Trump’s trade battle with China is intensifying, pushing tariffs on Chinese imports to at least 20%. The average tariff rate on goods from China is now about 34%, and some sectors are seeing tariffs even higher, especially electric vehicles and steel.

In stark contrast to the easing up with Canada and Mexico, the administration remains firm on increasing tariffs on Chinese goods—a policy that was a hallmark of Trump’s first term.

Economists initially thought Trump might soften his stance if the economy showed signs of stress, but his continued commitment to the trade war suggests they were wrong.

While the US president negotiated a revised trade agreement with Mexico and Canada, it’s not a total removal of tariffs. A 25% tariff still applies to goods not adhering to the new deal, meaning some imports from these nations are still facing hefty taxes.

Equity investments will continue: more caution, not panic

However, not all voices are pessimistic. David Booth, founder and chairman of Dimensional Fund Advisors, points out that many long-term investors remain confident in the market. Speaking to Yahoo Finance, Booth explained that while current market fluctuations might seem concerning, they don’t necessarily signal widespread panic.

“What we have are clients that are really long-term investors,” Booth elaborated. “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.’” This illustrates their commitment to staying invested despite short-term market worries.

Still Growing: Private sector job gains in Feb 2025 of 140k (chart) plausibly confirm that the US economy is still avoiding recession (gray bars). pic.twitter.com/dC9xwRGjOv

— Gene Epstein (@GeneSohoForum) March 7, 2025

Booth also minimized the idea that political leadership dictates stock market performance, asserting instead that markets are driven by fundamental economic forces, not by which political party is in power.

“It’s always helpful to remind people how markets work,” Booth elaborated. “These are buyers and sellers coming together, and they don’t trade unless each side thinks they got a good deal. Every day, prices are getting set at levels that induce people to come in and invest.” In essence, he described the market as a constant exchange where prices are continuously adjusted to attract both buyers and sellers.

Source: cryptopolitan.com