‘What worries me most’: Ex-Treasury chief predicts ‘rude shock’ as Trump plans take effect

The labor market added far more jobs than expected last month, but former treasury secretary Robert Reich warned that Americans could be in for a “crude and rude shock” in the coming weeks.

The U.S. added 228,000 jobs last month, far more than the 140,000 that economists had expected, and that number was nearly double the 117,000 roles added in February, but the former treasury secretary under Bill Clinton told CNN’s “The Situation Room” that president Donald Trump’s tariffs would have far-ranging consequences for the economy.

“Americans are going to feel the impact in a variety of ways,” Reich said. “It doesn’t show up in the employment report, obviously, because the employment report is for March. It is not for April, and April is the big month in terms of what happens to trade and prices and jobs and the future of the American economy. Americans are going to be paying much, much more because a lot of people don’t realize how much of what we buy comes from China. I’m not talking about agricultural commodities, I’m talking about goods and manufactured items and even assembly items. These are American companies doing things in China, also doing things in southeast Asia, assembling, making things, sending them back to the United States.”

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“It’s going to be a crude and rude shock for most Americans,” Reich added.

Americans buy shoes, clothing and many other items that are imported from China and other countries where labor and other costs are cheaper, and the tariffs are expected to substantially raise prices on all of those.

“One way of looking at this is this is the largest peacetime increase in taxes we have ever seen in the history of the United State,” Reich said. “I say that because a tariff is a tax, and people are going to be paying more. A lot of importers would like to maybe avoid shoving that additional cost onto people, but that’s what’s going to happen because, I mean, you can’t create money out of out of nowhere. These tariffs are going to be costly, and ultimately American consumers are going to pay.”

Those costs will eventually flow downstream to the job market, Reich said.

“As countries like China retaliate against American exporters,” Reich said, “it’s going to be even more complicated and difficult because a lot of companies will say to themselves, ‘Well, why hire more people if we don’t have a market, if we don’t have a market in in China, if Europe is going to retaliate,’ if we have the possibility, even the possibility of retaliation around the world, many companies in the United States are going to say, ‘Well, there’s no point in in expanding capacity, hiring, what we’re going to do is probably lay people off,’ and that’s that’s what worries me most, because that we’re on the road to both inflation and recession.”

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source https://www.rawstory.com/crude-and-rude-shock-waiting-once-trump-plans-go-into-effect/