Larry Summers Slams Trump's 'Bizarre' Tariffs On Canada And Mexico: 'This Is A Stop-Or-I'll-Shoot-Myself-In-The-Foot Kind Of Policy'

Larry Summers, the former U.S. Treasury Secretary, has criticized President Donald Trump’s ‘Bizarre' decision to impose a 25% tariff on goods from Canada and Mexico.

What Happened: Summers, in an interview with CNN, described the tariffs as a “stop-or-I'll-shoot-myself-in-the-foot kind of threat policy.” He emphasized that the tariffs defy economic logic, leading to higher prices for consumers and increased costs for American producers.

Summers noted that the extent of these new tariffs is significantly greater than those enforced during Trump’s first term. He emphasized the effect on the automobile manufacturing industry, a process that typically involves cross-border movements five to ten times.

According to Summers, the new tariffs will render North American companies and jobs less competitive in comparison to their counterparts in Europe, China, or Japan. He also questioned the logic behind targeting Canada, a country with higher minimum wages and more worker protection than the U.S.

See Also: Trump Tariffs Strengthen Dollar, But Hedge Fund CEO Sees Impending Decline

He also warned that the tariffs would prompt other countries to favor European and Asian products over American ones, further disadvantaging the U.S.

Why It Matters: The tariffs, which came into effect on Tuesday, have raised concerns about their potential impact on the North American economy. Analysts have warned that the tariffs could disrupt key supply chains and have far-reaching consequences for trade-intensive sectors, including automobiles, industrials, healthcare, and consumer goods.

Despite these concerns, some experts see the tariffs as a strategic move to transition the U.S. to a more sustainable economic model. Macro strategist Craig Shapiro argues that the tariffs could help shift the U.S. from a high-time preference society, focused on short-term gains, to a more sustainable, low-time preference model.

Meanwhile, the tariffs have led to a strengthening of the U.S. dollar. However, some experts, such as hedge fund manager Kevin C Smith, predict an inevitable devaluation of the dollar, attributing the global economic strain to the dollar’s dominance.

U.S. stock futures tumbled on Monday after President Trump imposed tariffs on three key trading partners — Canada, China, and Mexico. The new tariffs impose a 10% levy on China and a 25% levy on select imports from Canada and Mexico. The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ both experienced negative premarket trading.

Read Next: Palantir Technologies Plunges Overnight On Robinhood: Trump Tariff Impact Or Investor Jitters?

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.