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It’s unclear what impact President Donald Trump’s “Liberation Day” tariffs will have on the U.S. economy, but if things go badly, members of the administration are reportedly ready to blame Secretary of Commerce Howard Lutnick.
Lutnick, a businessman and former CEO of Cantor Fitzgerald, is aligned with the president on tariffs, believing they will balance the U.S. budget and reduce its deficit.
Despite fears that they could plunge the U.S. stock market – or worse, incite a recession – Lutnick has said they are “worth it” and “produce revenues,” though from American businesses that pay the tariffs, and U.S. consumers who have to help cover them.
Lutnick has even advocated for them, allegedly “pushing” for “more aggressive tariffs” one person close to the administration told Politico.
While Peter Navarro serves as Trump’s trade adviser, the Commerce secretary’s positive position on tariffs has now made him the de-facto fall guy should the economy or stock market respond poorly to Trump’s tariffs, two people told Politico.
A spokesperson for the White House told Politico that “every member of the Trump administration is aligned on finally leveling the playing field for American industries and workers.”
Spokesperson Kush Desai added: “President Trump has assembled the best and brightest trade team in modern American history to reignite American Greatness, and they are hard at work following the same playbook — President Trump’s playbook — to deliver for the American people,.”
Each time Trump has threatened to impose, or briefly imposed, 25 percent tariffs on Canada and Mexico – the nation’s largest trading partners – the markets have responded poorly.
Trump has not revealed what tariffs he will impose on which countries or if he will stick to reciprocal tariffs – those proportional to tariffs imposed by other countries. The president has mentioned the reciprocal tariff plan multiple times, but Treasury Secretary Scott Bessent indicated there could more narrowly tailored tariffs for the country’s largest trading partners by volume.
Bessent has remained a “measured voice” in the tariff talks, according to Politico.
A “worst case scenario” would be Trump implementing a 20 percent tariff across the board, a Moody’s analyst told The Washington Post. This would disproportionately hit lower-income consumers and businesses that rely on imported goods, send stocks plummeting and hurt U.S. jobs – essentially sending the U.S. into a recession.
While White House aides have reportedly drafted that proposal, it’s unclear how likely the scenario is.
Trump’s tariff plan will become clear on Wednesday afternoon when Trump hosts his “Liberation Day” event.
Although the tariffs will go into effect immediately, the stock market will be closed by that point so the economic impact will become clear on Thursday morning.
