As the U.S. gross domestic product (GDP) contracted in the first quarter, former U.S. Treasury Minister Janet Yellen warned that American corporations relying on Chinese minerals due to the tariff policy of the Donald Trump administration would face negative consequences for the U.S. economy.
In an interview with the Financial Times (FT) reported on the 1st (local time), former Minister Yellen said, "(The tariff policy) will have an enormously negative impact on businesses that depend on imports and consumers in the U.S." She added, "I’m not yet ready to say we will have a recession, but certainly, the possibility of a recession has increased significantly."
Earlier, the U.S. Department of Commerce announced on the 30th of last month that the preliminary GDP growth rate for the first quarter was recorded at -0.3% (annualized compared to the previous quarter). This contraction is analyzed to be due to a significant increase in imports as corporations stocked up in advance to respond to President Trump's tariff war.
On the 2nd of last month, President Trump announced reciprocal tariffs against trading partners worldwide, causing confusion in the markets. Subsequently, he postponed the implementation of reciprocal tariffs for 90 days for trading countries, excluding China, but the 145% tariff on Chinese imports remains in effect.
Former Minister Yellen stated, "The U.S. significantly relies on China for most of the key minerals needed for clean energy technologies, batteries, and so on," and noted, "By imposing massive tariffs, we could potentially hinder industries that might have opportunities."