President Trump threatens 200% tariff on alcohol from EU
President Donald Trump has threatened to place a 200% tariff on all alcohol from the European Union.
WASHINGTON – Americans are closely watching President Donald Trump’s sweeping tariff threats and deep cuts to the federal government. Now they can add rising fears of a recession and a possible government shutdown to the list.
Congress faces a Friday deadline to keep the government’s doors open and dodge a painful shutdown. The House already passed a spending bill to temporarily fund the government until September, but the Senate hasn’t come to an agreement.
Senate Minority Leader Chuck Schumer, D-N.Y., said Thursday he would vote for a GOP-backed funding extension, significantly increasing the chances that enough Democratic senators will side with Republicans to avert a shutdown.
And what’s next for U.S. trading partners? The president vowed on Thursday that he would not back down on imposing major reciprocal tariffs next month. Trump also dismissed several days of volatility in the stock market – and ensuing concerns that a recession will rock the U.S. this year.
The Trump administration also made federal agencies submit plans this week for large-scale layoffs in its push to shrink the government. However, a California judge ordered six agencies to reinstate thousands of recently hired employees who were fired as part of the purge.
Keep up with live updates from the USA TODAY Network.
What is a recession?
Trump won’t say whether he thinks his sweeping tariff plan could help push the country into a recession. But the threat of tariffs and the-already rising costs of everyday items are raising concerns about where the economy is headed.
A recession could happen if more people are out of work, large companies see lower profits, the stock market slips and home prices tumble, according to the International Monetary Fund.
Generally, a recession is marked by an extended period of many months or more of economic downturn. And even when a recession is acknowledged by experts and officials, not everyone agrees on when it started or when it ends.
− Damon C. Williams, Zachary Schermele
What is a tariff?
A tariff is a form of tax imposed on imports from another country.
Economists generally agree that trade barriers raise consumer prices and negatively impact economic output and income, according to the Tax Foundation, a nonpartisan tax policy nonprofit.
Tariffs create more demand for domestic manufacturers, but those companies are also part of the global supply chain and therefore also impacted by tariffs, experts have previously explained to USA TODAY.\
Trump’s motivation for implementing tariffs is to get help from China, Canada and Mexico to curb the flow of migrants and illegal drugs into the U.S. The president has insisted that the countries have not done enough to help address what he sees as core issues for his administration.
– Kinsey Crowley and Jonathan Limehouse