Labor economist Kathryn Anne Edwards believes that President Donald Trump is poised to make history with his global trade wars, but not the kind of history he will want to be remembered for.
Writing in Bloomberg, Edwards argued that the United States economy is "plodding toward a recession" and that "this will arguably be the only recession directly caused by White House policy."
While many recessions have a complex series of causes, Edwards believes that the one threatened now will be caused solely by the chaos being set off by Trump's trade wars.
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"Tariffs... both the ones levied by the administration and those put on the U.S. by its trading partners in retaliation, are paralyzing business activity and rattling consumers," she contended. "Wall Street firms are rapidly reducing their estimates for how much gross domestic product will expand. The Federal Reserve Bank of Atlanta’s widely-followed index of the economy in real time has turned negative. The Conference Board and the University of Michigan both report steep declines in consumer confidence."
Edwards also believes that, even if Congress were to intervene to block Trump's sweeping tariffs, it may be too late to stop a recession.
"Recessions are often self-fulfilling in that if enough people believe it will happen, it will happen as consumers pull back on things like spending and business cut workers in anticipation of the inevitable downturn," she wrote. "Aggregate demand sees three hits during recessions: Workers who lose jobs; workers who are afraid of losing their jobs; and workers who keep their jobs but experience much slower wage growth."
The bottom line, she argued, is that while there have been many recessions before, "This one’s claim to infamy is that it’ll be the only one self-inflicted."