Houston: The "disorderly" implementation of trade and government reform policies by the administration of President Donald Trump has increased the risk of a "largely avoidable" economic downturn in the US, a leading S&P economist stated on Wednesday.
Paul Gruenwald, global chief economist at S&P Global Ratings, noted that the uncertainty caused by frequent shifts in White House trade tariff policies has likely delayed business investments and led consumers to reduce spending.
Gruenwald also highlighted that efforts to shrink government spending and reduce waste, overseen by billionaire Trump advisor Elon Musk, have been more disruptive than necessary. He compared this to the "reinventing government" downsizing initiative under President Bill Clinton in the 1990s, which was carried out in a "predictable and orderly" manner.
"The objectives themselves, I think most of them have merit, but the way they’re being implemented is very disorderly," Gruenwald said in an interview with AFP on the sidelines of the CERA Week energy conference.
"If this leads firms and consumers to hold back on their spending and demand pulls back, we could get a slowdown or even a recession that was largely avoidable," Gruenwald warned. "That is a downside risk."
Gruenwald noted that the US economy was on solid footing when Trump took office in January, adding, "The passing of the economy from the Biden administration to the Trump administration was pretty strong."
He also pointed to a significant rise in the US economic policy uncertainty index, a benchmark that has garnered more attention since Trump returned to the White House. The index is currently at one of its highest levels in its 40-year history—below its peak during the early days of the COVID-19 pandemic but higher than during most of Trump’s first term.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
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