Summers, Fink warn Trump tariffs risk U.S. recession, 2Mn jobs at risk
NEW YORK, UNITED STATES — Former United States Treasury Secretary Lawrence Summers has warned that the country is now likely headed for a recession, with potentially 2 million Americans losing their jobs due to the latest round of tariff increases introduced by President Donald Trump.
“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 with David Westin. He also cautioned that household incomes could drop by $5,000 or more per family.
Summers, who served in both the Clinton and Obama administrations, drew comparisons between the current tariff plans and the infamous Smoot-Hawley tariffs of the 1930s, warning that the new measures “could surpass those that made the depression great.” He urged policymakers to reconsider: “It would be wise to be backing off the policies that have been announced.”
Market signals and economic anxiety
According to Summers, markets are speaking with clarity about the damage the tariffs are inflicting, with stocks surging on any sign of possible relief and plunging when new levies appear imminent.
He warned, “We’re very likely, in the context of a recession, to see markets reach levels significantly below their current level.”
Moreover, some economists warn that instead of creating jobs, new tariffs could accelerate automation in manufacturing as companies seek to offset higher labor costs associated with moving production back to the U.S.
Business leaders echo recession fears
Echoing Summers’ concerns, BlackRock CEO Larry Fink said most CEOs he speaks with believe the U.S. is already in a recession. In fact, a recent CNBC survey of 22 CEOs from its CEO Council has revealed widespread concern over the economic impact of sweeping tariffs.
The majority of respondents—69%—expect a recession, with over half predicting it will hit this year.
The survey also highlighted the likelihood of job losses and price increases. Over one-third (37%) of CEOs said they expect to cut jobs this year, while 82% anticipate “resurgent inflation.” Many companies are already planning to raise prices by 5% to 20%, passing some of the tariff costs onto consumers.
“The economy is weakening as we speak,” Fink stated at the Economic Club of New York, citing falling travel demand and persistent inflation. He warned that stock markets could decline further as the tariff policies destabilize the global economy.
Fink added that the U.S. dollar is likely to weaken and consumer spending will probably fall as Americans adjust to higher prices.
Despite the current turmoil, Fink suggested that long-term investors may eventually find buying opportunities, but cautioned, “That doesn’t mean we can’t fall another 20% from here, too.”
