A question now is whether the hundreds of billions of dollars in additional tariff revenue that Trump predicted would be raised would be used to curb the deficit or injected into the economy in the form of tax cuts, said Neil Shearing, chief economist at Capital Economics.
If it was used to pay down the budget deficit then the US economy “would be lucky to avoid a recession”, he said. “If it is given back to consumers via other tax cuts, then economic growth may not suffer too badly.”
