The U.S. economy could lose up to $30 trillion due to Donald Trump’s new tariff policy, warns former Treasury Secretary Larry Summers.
Former U.S. Treasury Secretary Larry Summers sharply criticized Donald Trump’s new import tariffs, calling them “masochistic” and economically disastrous. According to Summers, just one hour of presidential rhetoric is causing the country hundreds of billions in losses.
“Never before has a president’s words cost the nation so much. The loss from tariff policy is estimated at around $30 trillion — or $300,000 per family of four,” he wrote on X (formerly Twitter).
According to the economist, $3 trillion was wiped off the U.S. stock market within an hour of Trump’s announcement. And that’s just part of the impact. China quickly responded by imposing 34% retaliatory tariffs on American exports, further deepening the market slump.
Major stock indexes plummeted:
- S&P 500 dropped 4.5%
- Nasdaq fell 4.2%
- Dow Jones declined 4.4%
Speaking to CNN, Summers expressed concern over what he sees as a lack of basic economic competence in the administration. He stated that the tariffs were calculated using a simplistic formula that failed to take into account real economic complexity.
“My main concern right now is the absence of basic competence. There is no coherent logic behind these decisions,” he said.
According to the White House, the tariffs were determined using a special formula. The Office of the U.S. Trade Representative claimed it was a valid method to simulate the combined effects of tariff, tax, and regulatory policies.
Many economists and analysts from leading banks are sounding the alarm in rare unison: if Trump’s proposed tariffs remain in place, the U.S. could face serious economic pain — possibly even a recession.
Nevertheless, on Friday, Trump offered a glimmer of hope by announcing talks with Vietnamese President To Lam. He claimed that Vietnam is willing to eliminate tariffs altogether if an agreement with the U.S. can be reached.
“Vietnam wants to cut their tariffs down to ZERO if they are able to make an agreement with the U.S.,” Trump wrote on Truth Social.
