Larry Summers Slams Trump's 'Bizarre' Tariffs On Canada And Mexico: 'This Is A Stop-Or-I'll-Shoot-Myself-In-The-Foot Kind Of Policy'

Former U.S. Treasury Secretary Larry Summers has criticized President Donald Trump's decision to impose a 25% tariff on goods from Canada and Mexico, describing the move as "bizarre" and a "stop-or-I'll-shoot-myself-in-the-foot kind of threat policy." In an interview with CNN, Summers argued that the tariffs defy economic logic, leading to higher prices for consumers and increased costs for American producers. The extent of these new tariffs is significantly greater than those enforced during Trump's first term, further disadvantage North American companies and jobs compared to their counterparts in Europe, China, or Japan.



The automobile manufacturing industry, which typically involves cross-border movements five to ten times, is particularly vulnerable to these tariffs. Summers warned that the new tariffs would render North American companies and jobs less competitive, potentially leading to job losses and a decline in investment in the sector. Moreover, the tariffs could prompt other countries to favor European and Asian products over American ones, further disadvantage the U.S. in the global market.

The tariffs have also led to a strengthening of the U.S. dollar, which may further disadvantage American exports in the global market. Some experts, such as hedge fund manager Kevin C Smith, predict an inevitable devaluation of the dollar, attributing the global economic strain to the dollar's dominance. This devaluation could exacerbate the competitiveness issue for North American companies.

In addition, the tariffs have resulted in a decline in U.S. stock futures, with the SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ experiencing negative premarket trading. This indicates that investors are concerned about the potential impact of the tariffs on the U.S. economy and the competitiveness of American companies.



While some experts see the tariffs as a strategic move to transition the U.S. to a more sustainable economic model, the majority of economists and analysts agree that the tariffs will have a negative impact on the North American economy. The tariffs could disrupt key supply chains and have far-reaching consequences for trade-intensive sectors, including automobiles, industrials, healthcare, and consumer goods.

In conclusion, Larry Summers' criticism of President Trump's tariffs on Canada and Mexico highlights the potential negative impact on the North American economy and the competitiveness of American companies. The tariffs lead to higher prices for consumers, increased costs for producers, and a strengthening of the U.S. dollar, which disadvantages American exports in the global market. The tariffs have also resulted in a decline in U.S. stock futures, indicating investor concern about the potential impact on the U.S. economy. Despite some optimistic views, the majority of economists and analysts agree that the tariffs will have a negative impact on the North American economy.