Janet Yellen's Stark Warning on Trump's Trade Policies

Former US Treasury Secretary Janet Yellen has issued a dire warning about the potential economic fallout from President Donald Trump's latest trade levies. According to Yellen, these policies could have a "tremendously adverse" effect on American economic growth, particularly for businesses reliant on essential mineral imports from China. The situation is so severe that it could potentially push the United States into a recession.

"[The tariff strategy] will have tremendously adverse consequences for the United States, for consumers, for the competitiveness of firms that rely on imported inputs," Yellen explained in an interview with the Financial Times. She pointed out that approximately 40% of American imports are materials used in domestic manufacturing, making the impact of these levies especially concerning.

The Economic Data Behind the Concern

Yellen's comments come in the wake of alarming economic data showing the American GDP contracting for the first time in nearly three years. This downturn follows President Trump's imposition of heavy "reciprocal" duties on numerous countries on April 2, a move that has already caused significant market volatility. While most of these tariffs have been temporarily suspended for 90 days, the 145% taxes on Chinese imports remain in effect, continuing to strain economic relations and market stability.

Yellen stopped short of forecasting a recession but admitted, "I'm not yet ready to say that I’m forecasting a recession, but certainly the odds have gone way up." Her words serve as a sobering reminder of the fragile state of the US economy under current trade policies.