Wharton School finance professor emeritus Jeremy Siegel issued a strong warning Friday about President Donald Trump's sweeping tariff policy, arguing it could be more damaging than the infamous Smoot-Hawley Tariff Act of 1930.
What To Know: Speaking on CNBC's Squawk Box, Siegel said, "I don't know why Trump didn't learn the lesson of the Smoot-Hawley Tariff [Act], because I know the [Federal Reserve] learned the lesson of its mistakes in 1930, '31 and '32."
He emphasized that while the Fed avoided a repeat of past economic failures during the 2008 financial crisis, Trump's tariff strategy risks serious economic consequences.
Siegel also criticized Trump's tariff policy as "a self-inflicted wound" and "an unforced error - did not have to happen."
He warned that maintaining tariffs raises the risk of recession. "If these stay on, I think the probability of a recession has probably moved above 50%."
While Siegel remained hopeful for economic recovery, he noted that uncertainty surrounding tariffs "will reverberate for a number of years."
What Else: Trump declared a national emergency this week to impose reciprocal tariffs on major trade partners, aiming to strengthen the U.S. economy and protect American workers.
Citing a $1.2 trillion trade deficit, the White House blames unfair trade practices, high foreign tariffs and non-tariff barriers.
The new policy includes a 10% blanket tariff on all imports starting April 5, 2025, with additional tariffs on countries like China, India and the EU. Exemptions cover essential materials.
Analysts warn these tariffs could fuel inflation, trigger a global recession and invite retaliatory measures. China's Finance Ministry has already declared a 34% tariff on all U.S. imports, set to take effect on April 10.
Global leaders, including those from China, the EU and Canada, have condemned the move, with some pledging counteractions. JP Morgan predicts severe economic consequences if policies persist.
Price Action:
