Former Treasury Secretary's Stark Warning

Janet Yellen, the former US Treasury Secretary, has issued a stark warning about the potential economic fallout from President Donald Trump's trade tariffs. Speaking to the Financial Times, Yellen highlighted the "tremendously adverse" effects these levies could have on American economic growth, particularly for businesses reliant on imports from China.

Impact on US Economy

Yellen pointed out that approximately 40% of American imports are used as materials for domestic manufacturing, suggesting that the tariffs could "hobble" these businesses. She also raised concerns about the increased likelihood of a recession, citing recent data showing the US GDP shrinking for the first time in nearly three years.

Market Volatility and Temporary Suspensions

The imposition of heavy "reciprocal" duties by Trump on April 2 led to significant market volatility. Although most tariffs were temporarily suspended for 90 days, the 145% taxes on Chinese imports remain in place, continuing to strain trade relations and economic stability.