Trump Says US May Not Be in Recession

WASHINGTON DC, MONDAY - The North American region remains overshadowed by uncertainty due to the tariff policies of United States President Donald Trump. Nevertheless, Trump dismissed predictions that the tariff policies he imposed on China, Canada, and Mexico would lead the U.S. into a recession.

In an interview on the program "Sunday Morning Futures" on Fox News aired on Sunday (9/3/2025) local time or Monday (10/3/2025) Indonesian time, Trump announced the suspension of the implementation of a 25 percent import tariff on Canada and Mexico until April 2, 2025.

Trump stated that he wanted to assist U.S. automotive manufacturers. Starting April 2, reciprocal tariffs will be in effect between Canada and Mexico with the U.S. In fact, Trump imposed tariffs last week but suspended them as soon as Canada implemented retaliatory tariffs. Mexico has not yet announced its retaliatory tariffs, but they have stated that a list has already been prepared.

American automotive companies, including Stellantis, General Motors, and Ford, have requested additional time from Trump. Canada and Mexico are the locations of factories belonging to these American automotive brands.

Due to Trump's actions of imposing and then suspending tariffs, the stock market became unstable. Companies listed on the S&P 500 experienced a decline in stock value by up to 2 percent. Nevertheless, Trump refused to acknowledge that the United States was entering a recession.

"I don't like to predict things like that. We're in a transition period. We're going to restore America to greatness," Trump said.

Trump also refused to address the concerns of U.S. companies seeking clarity on the economic roadmap. According to him, business and industry players can adapt and will be fine.

Trump blamed Canada and Mexico for the entry of fentanyl drugs into the U.S. Canada denied the accusation, stating that only 0.1 percent of fentanyl circulating in the U.S. was smuggled from Canada. As a goodwill gesture, Canada appointed a special envoy for border security affairs and increased border monitoring funding by 1.3 billion Canadian dollars.

Regardless of that, Trump still announced additional tariffs on Canada. A 25 percent tariff on steel and aluminum will be implemented starting Wednesday (12/3/2025), and tariffs on logs will take effect on April 2.

Meanwhile, in an interview with NBC, US Commerce Secretary Howard Lutnick said Americans should not worry about a recession. "Once fentanyl smuggling is resolved by Mexico and Canada, tariffs will be resolved," he said.

In essence, for the Trump administration, these tariffs are a tool used not for a trade war but for a drug war. If Mexico and Canada can stop drug smuggling, tariffs can be renegotiated.

In Mexico City, Mexican President Claudia Sheinbaum announced that she had called Trump to discuss tariffs. Without disclosing the content of the conversation, Sheinbaum said that diplomacy could solve everything.

"Indeed, Mexico-US history is marked by conflict. However, it is more marked by friendship and cooperation," he said.

However, Sheinbaum said Mexico will not give up its sovereignty, and is preparing a list of goods subject to retaliatory tariffs in case talks with Trump turn out badly.

In Canada, Prime Minister Justin Trudeau is also preparing to give retaliatory tariffs. In addition, there are also non-tariff retaliatory measures, one of which is not selling US products in the Canadian market. Alcoholic beverages, packaged foods, and children's toys are being pulled from shopping centers.

"We don't want to do it, but the US has not acted as a good neighbor," Trudeau said.

Trump's tariff push and pull has been widely criticized. Senator Adam Schiff of California told ABC that farmers and auto workers are particularly vulnerable to yo-yo behavior. Uncertain markets are hurting businesses.

Moody's economist Mark Zandi told CNN that this is the first time the market has been volatile and everyone is nervous. "If confidence levels go down in the next three months and consumers refuse to spend, it's all over," he said.

On the Council of Foreign Relations website, February 11, 2025, former deputy US trade representative John Veroneau explained that Trump had the wrong strategy and target. Tariffs are not the solution to the decline of industry in the US.

The US industry is stagnant, even declining, due to wrong economic policies in the procurement of raw materials. In addition, there is also a need for reform in the development and adaptation of practical technology. Tariffs are not the solution to the problem of copyright theft and piracy.

"The U.S. trade deficit can't be fixed directly with tariffs. It's our fiscal situation that needs fixing," Veroneau wrote. (AP/Reuters)