{"id":901197,"date":"2026-09-19T03:22:14","date_gmt":"2026-09-19T03:22:14","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/901197\/"},"modified":"2026-09-19T03:22:14","modified_gmt":"2026-09-19T03:22:14","slug":"trumps-latest-trade-threat-would-throw-america-into-a-massive-recession","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/901197\/","title":{"rendered":"Trump\u2019s Latest Trade Threat Would Throw America Into A Massive Recession"},"content":{"rendered":"

WASHINGTON \u2013 President Donald Trump<\/a>\u2019s latest trade threat would throw the country into a massive recession, ending economic relations with 95 countries and territories \u2014 from China to Tawain to Germany to Israel \u2014 while further exacerbating, not helping, the nation\u2019s budget woes.<\/p>\n

\u201cIt\u2019d be catastrophic,\u201d said Scott Lincicome, a trade analyst at the Cato Institute.<\/p>\n

\u201cMarkets would crater immediately. The country would enter a recession,\u201d said University of Michigan economist Justin Wolfers, adding that the long-term effects would be even worse. \u201cFifty years later, the U.S. would be much poorer than it otherwise would be.\u201d<\/p>\n

Trump has repeatedly claimed in recent days that ending trade relations with countries that export more to the United States than they import would somehow generate vast amounts of cash for the U.S. government.<\/p>\n

\u201cIf we stopped Trading with every country that we have a Deficit with, which is most of them, we would make, at least, 1.5 Trillion Dollars a year,\u201d he wrote<\/a> in Wednesday social media post.<\/p>\n

The claim, and Trump\u2019s insistence he will one day act on it, has received very little attention, likely because it is so nonsensical it\u2019s difficult to imagine it could ever actually come to pass. It is nonetheless noteworthy that the president \u2015 a man with vast powers over trade, diplomacy and war \u2015 continues to wholeheartedly believe something so untethered from reality. <\/p>\n

International trade is done not by the government, but by American individuals and companies buying and selling from counterparts in other countries. Ending that trade would not reduce the U.S. budget deficit at all and, in fact, would make it far worse.<\/p>\n

\u201cIt\u2019s all wrong, so we can ignore it,\u201d said Douglas Holtz-Eakin, a conservative economist with the American Action Forum and formerly the director of the Congressional Budget Office. \u201cIt\u2019s a non-starter. He\u2019s not going to do it, he just says it.\u201d<\/p>\n

Trump\u2019s White House did not respond to HuffPost queries on the matter.<\/p>\n

Trump began his latest episode of mispresenting how international trade works in a Sept. 4 social media post<\/a>, following a stronger-than-expected jobs report, in which he again demanded that the Federal Reserve lower interest rates.<\/p>\n

\u201cLOWER THE RATE OR I\u2019LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT, which the U.S. Supreme Court, in its ridiculous and very costly Tariff decision, strongly acknowledged \u2018the President\u2019 has an absolute right to do. IT\u2019S BETTER THAN TARIFFS!\u201d Trump wrote.<\/p>\n

He repeated that threat speaking with reporters during his $7.2 million, taxpayer-funded golf vacation at his resort in Doonbeg, Ireland.<\/p>\n

\u201cI\u2019ll have no choice. We don\u2019t want to have deficits with nations. We want to have surpluses or at least break-evens,\u201d he said on Sept. 13 at the airport in Shannon just before the flight back to Washington.<\/p>\n

Three days later, after the Fed raised interest rates despite Trump\u2019s demands, he renewed his threat and added that doing so would generate money to let him pay down the national debt, too.<\/p>\n

\u201cIf we wanted to get rid of deficits, which we could do with the swipe of the pen with every country, we\u2019d make a trillion and a half dollars a year,\u201d he told reporters traveling with him to a rally in North Carolina. \u201cWe\u2019d pay off our debt. We\u2019d do all sorts of things. But we haven\u2019t chosen to do that. But at some point, we will.\u201d<\/p>\n

Trump elaborated on that theory in a follow-up question: \u201cIf we lose $50 billion a year with a country, and we say, \u2018We\u2019re not going to trade with you anymore,\u2019 we don\u2019t lose $50 billion a year. It\u2019s very simple. Right?\u201d<\/p>\n

Economists say he could not be any more wrong.<\/p>\n

First, trade is, by definition, not a zero-sum game. If Americans can no longer purchase goods from a country and have $50 billion a year unspent, it is because they don\u2019t have $50 billion worth of goods they were trying to acquire.<\/p>\n

And second, just because Americans are not spending $50 billion on goods from a particular country \u2014 or $1.5 trillion on goods from 95 countries \u2014 does not mean the U.S. government\u2019s financial picture would improve by a penny. The only way Trump could use that \u201csaved\u201d money to \u201cpay off our debt\u201d would be to force Americans to turn it over at a 100% tax rate.<\/p>\n

\u201cHe\u2019s confusing the finances of the U.S. government with the finances of Americans,\u201d Wolfers said.<\/p>\n

Trump\u2019s scheme to end trade with countries with which the U.S. runs a trade deficit would also devastate American manufacturers and farmers who rely on exports.<\/p>\n

The 95 countries and territories with which the United States ran a trade \u201cdeficit\u201d in 2025 make up just 40% of all countries and territories as defined by the U.S. Commerce Department, but account for some 80% of total trade, according to a HuffPost analysis.<\/p>\n

Of that, $3 trillion are imports, many of which are raw materials or goods needed by U.S. manufacturers, and $1.5 trillion are exports \u2014 manufactured products and farm goods that Americans sell abroad.<\/p>\n

Ending that trade would hurt all those domestic businesses, some drastically, while also causing a recession and slashing tax revenues, making the government\u2019s budget problem even worse.<\/p>\n

\u201cHe\u2019d pour fuel on the fire his tariffs and Iran war started, forcing prices on Americans\u2019 daily needs up even more and cutting us off from resources we need for manufacturing and construction,\u201d said Andrew Bates, who worked in the United States Trade Representative\u2019s office in the Obama administration and then in the White House under President Joe Biden<\/a>.<\/p>\n

\u201cWhen the president wants to punish Iran for its misdeeds, he cuts it off from the rest of the world. When he wants to help the American economy, he talks about cutting it off from the rest of the world,\u201d Wolfers said. \u201cIt\u2019s hard to believe that these ideas both make sense.\u201d<\/p>\n

Holtz-Eakin, for one, said Trump says so many ridiculous things that he no longer bothers to analyze much of what comes from the president, under the assumption that a truly deranged policy would likely be blocked.<\/p>\n

\u201cYou\u2019ve already wasted too many IQ points thinking about this,\u201d he told a reporter.<\/p>\n","protected":false},"excerpt":{"rendered":"WASHINGTON \u2013 President Donald Trump\u2019s latest trade threat would throw the country into a massive recession, ending economic…\n","protected":false},"author":2,"featured_media":901198,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[45,49,48,1215],"class_list":["post-901197","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-ca","tag-canada","tag-trade"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/901197","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=901197"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/901197\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/901198"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=901197"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=901197"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=901197"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}