US President Donald Trump's economic policy is controversial, to say the least. The emerging trade war with new tariffs against important trading partners such as the EU, Canada and China is being widely criticized. And in the US, it is dividing the waters. Here, a majority of Americans - 57 percent - believe that Trump's economic policy is "too unpredictable". This is shown by a new opinion poll from Reuters/Ipsos.
Instead of the many tariffs, Americans want a greater focus on fighting high prices. There is growing concern that Trump's policies will raise prices instead of lowering them, as he has promised, the survey shows.
In response to the widespread concerns, the Trump camp has said that short-term economic pain may be necessary to increase production in the US and create better conditions further down the road. Trump and those around him will not even rule out a recession - an economic downturn. Commerce Secretary Howard Lutnick says a recession will be "worth it" to get Trump's policies enacted.
However, history shows that recessions - if they occur - are costly for a country. The pain is never evenly distributed. In addition, the length and depth of the downturn, as well as the speed of recovery, are unpredictable, notes Reuters.
Paul Gruenwald, global chief economist at credit rating agency Standard & Poor's, can see the motivation behind most of Trump's actions. But they are being introduced in such a messy way that it can cause unnecessary problems, he says.
- If it leads to companies and consumers holding back on spending and demand falling, then we could have an economic slowdown or even a recession, which was largely avoidable, he tells AFP.
Christine Lagarde, head of the European Central Bank, warns that a global trade war - which many believe Trump is about to start - will have major consequences. But that it will be worst for the United States.
- It will have serious consequences for growth and prices around the world, but especially in the United States, she says, according to Reuters.
Several large American export companies are also expressing concern. Most notably, Tesla, owned by Trump's right-hand man Elon Musk, warns that Trump's tariffs are backfiring. When other countries impose higher tariffs on American goods in return, it hits American companies, it says. Tesla's concerns are expressed in a letter to Jamieson Greer, the US trade representative. He is responsible for developing and promoting US trade policy abroad.
The letter, which is public, is unsigned. According to the Financial Times, because no one at the company dared to sign it for fear of being fired by Elon Musk. It is one of hundreds sent by companies expressing concern. The letter from Tesla says it is important to ensure that Trump's efforts on trade "do not unintentionally harm US companies".
According to investment bank J.P. Morgan, the risk of a US recession this year is about 40 percent. The risk will increase if Trump implements another round of planned tariffs in April.
Inflation, which rose under Trump's predecessor, Democrat Joe Biden, remains high and is expected to rise further due to the tariff policy, analysts said, according to Reuters. Republican politicians and Trump supporters, however, still support the president's economic policies.
Nearly 80 percent of Republicans surveyed in the poll say Trump's actions "will pay off in the long run."
jel /ritzau/
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