Former US treasury secretary warns of likely recession, 2 mln layoffs

WASHINGTON: Former US Treasury Secretary Lawrence Summers said in an interview with Bloomberg TV on Tuesday that the United States is likely heading into a recession, with the possibility of 2 million Americans losing their jobs, as a result of the ongoing tariff increases.

"It's more likely than not that we're going to have a recession - and in the context of a recession, we'll see an extra 2 million people be unemployed," Summers said on Bloomberg Television's Wall Street Week, reported Xinhua.

"We'll see losses in household income" of US$5,000 per family or more, said Summers, who is Harvard University professor and paid contributor to Bloomberg TV.

Summers argued that the tariff plans by the Trump administration exceed even those of 1930 that "made the depression great," noting that it would be wise to be "backing off the policies that have been announced."

Despite warnings from Summers and other economists, the White House indicated on Tuesday that the policies will go into effect as previously planned.

"The president was asked and answered this yesterday. He said he's not considering an extension or delay. I spoke to him before this briefing. That was not his mindset. He expects that these tariffs are going to go into effect," White House Press Secretary Karoline Leavitt said at a press briefing.

On April 2, US President Donald Trump signed an executive order regarding the so-called "reciprocal tariffs," announcing that the United States will impose a 10 per cent "baseline tariff" on trade partners and higher tariffs on certain partners, with some facing tariffs exceeding 30 per cent, and even 40 per cent.

The 10 per cent "baseline tariff" went into effect on April 5, and the higher tariffs on certain trading partners are set to go into effect on Wednesday, April 9.

Although Trump has repeatedly claimed that the tariff increases will help generate revenue for the US government, reduce the trade deficit, and revitalise American manufacturing, economists and business leaders warn that these tariff measures will drive up prices, harm American consumers and businesses, disrupt global trade, and be detrimental to global economic growth.

Several US trade partners have already announced countermeasures.

--BERNAMA-XINHUA