Top White House trade adviser Peter Navarro on Monday “guaranteed” that the US will not plunge into a recession under President Trump and claimed there would be no inflation despite ongoing fallout from his “Liberation Day” tariffs.
Navarro’s promise comes amid concern from Wall Street that the US economy may already be contracting in the aftermath of Trump’s sweeping announcement of new tariffs last week.
“It’s finding a bottom now,” Navarro said of the stock market freefall during an interview with Fox News “Ingraham Angle” host Laura Ingraham Monday night.
“But look, here’s the thing, it’s going to shift over, and it’s going to be companies in the S&P 500 who are the first to produce here,” he added. “Those are the ones going to lead to recovery, and it’s going to happen.”
Navarro then made a pair of bold economic predictions.
“Dow: 50,000, I guarantee that, and I guarantee no recession,” the White House official declared.
Navarro’s confidence comes from his belief that Congress will soon enact the president’s economic agenda, including eliminating taxes on tipped wages and overtime pay and extending tax cuts authorized during Trump’s first term.
“Why? Because when we pass the biggest, broadest tax cut in history, within a matter of months, that’s going to be a great stimulus,” the Trump adviser said.
“There’s not going to be any inflation,” Navarro continued. “We’ve already had a significant drop, a huge drop in oil prices – that’s like a point off the [inflation index]. We’re going to have lower yields and mortgage [rates].”
In contrast, BlackRock CEO Larry Fink told the Economic Club of New York on Monday that most business leaders already feel the nation is in an economic downturn.
“Most CEOs I talk to would say we are probably in a recession right now,” Fink said.
A recession is a period of significant decline in economic activity that lasts for more than a few months. It’s typically recognized by two consecutive quarters of negative gross domestic product (GDP) growth.
Trump’s reciprocal tariff plan has roiled the stock market, but it’s too early to tell what lasting effect it will have on economic growth.
In the first two days following Trump’s announcement last week, the S&P 500 index plummeted 10.5% – its biggest two-day loss since March 2020.
The Dow Jones Industrial Average fell more than 300 points on Monday and is more than 10% below its December record close.
Meanwhile, the Nasdaq Composite was up less than a percentage point on Monday but confirmed it was in a bear market, defined as a decline of 20% or more below its record close, according to Reuters.
Navarro confirmed that foreign leaders are calling the White House and desperately trying to work out a deal to cut the new tariffs, but he argued they’re focusing on the wrong thing.
The leaders are “saying ‘We want to talk. We’ll lower our tariffs to zero if you’ll lower yours’… That’s not the problem,” Navarro said.
The trade adviser cited the example of Vietnam, which was hit with a 46% levy, and sells “$15 for every $1 we sell them.”
“Zero tariffs would get us no reduction in the $123 billion deficit we have,” Navarro argued, adding that “$5 of that $15 they sell us … It’s China.”
“They don’t buy anything ours and they want to go to 0-0.”
