Trump’s Tariff-Rate Cut Strategy Could Trigger Economic Storm

President Trump’s call for simultaneous tariffs and lower interest rates faces strong criticism from economists who warn this combination could backfire.

Experts explain that tariffs typically increase inflation, which would force the Federal Reserve to maintain higher interest rates.

The only scenario where both high tariffs and low rates might coexist would be during an economic downturn, a situation experts warn could harm rather than help the economy. The challenge is further complicated by current full employment conditions and existing inflation concerns.

Carl Weinberg of High Frequency Economics points out the inherent contradictions in Trump’s broader economic agenda, which includes tax cuts, increased tariffs, maintained safety-net spending, and mass deportations – all while trying to stimulate domestic manufacturing. These conflicting goals, combined with the proposed tariff and interest rate strategy, could create significant economic challenges rather than the intended benefits.