Olusegun Ariyo
Former United States Secretary of Treasury Lawrence Summers has warned that the nation is headed for a serious financial crisis wholly induced by the US government’s tariff policy.
Summers noted that the long-term interest rates are gapping up, even as the stock market moves sharply downwards – a development he described as a highly unusual pattern.
According to him, this suggests a generalized aversion to US assets in global financial markets.
Summers made this known in a post on his X handle on Wednesday amid the tariff war between the United States and China.
He lamented that the US is being treated by global financial markets like a problematic emerging market.
China raised its tariff on the US to 84 percent, up from 34 percent, effective April 10.
The retaliatory tariffs were announced shortly after US President Donald Trump nearly doubled duties on Chinese imports.
US and China are now in a significant escalation of their trade war.
Discussing the matter on X, Summers maintained that the only way to mitigate the risks is for Trump to back off his current path.
He said: “Developments in the last 24 hours suggest we may be headed for a serious financial crisis wholly induced by the US government tariff policy.
“Long-term interest rates are gapping up, even as the stock market moves sharply downwards. This highly unusual pattern suggests a generalized aversion to US assets in global financial markets. We are being treated by global financial markets like a problematic emerging market.
“This could set off all kinds of vicious spirals, given government debts and deficits and dependence on foreign purchasers.
“The only way to mitigate these risks is for the President @realDonaldTrump to back off his current path. This is the first US bout of US financial instability caused by the US government.”
