By Doina Chiacu
WASHINGTON (Reuters) -President Donald Trump declined to predict whether the U.S. could face a recession amid stock market concerns about his tariff actions on Mexico, Canada and China over fentanyl.
The Republican president, whose trade policies have rekindled fears of worsening U.S. inflation, was asked if he expected a recession this year in a Fox News interview broadcast on Sunday.
"There is a period of transition, because what we're doing is very big. We're bringing wealth back to America," Trump told the "Sunday Morning Futures" program. "It takes a little time, but I think it should be great for us."
Tariffs have been one key concern for investors, as many believe they can harm economic growth and be inflationary. While Trump acknowledged as early as February 2 that his sweeping tariffs could cause some "short-term" pain for Americans, his own advisers have repeatedly downplayed any negative impact.
"Absolutely not," Commerce Secretary Howard Lutnick said on Sunday. "There's going to be no recession in America."
Lutnick did acknowledge that the Trump tariffs would lead to higher prices for U.S. consumers on some foreign-made goods, but said American products will get cheaper.
"He's not going to step off the gas," Lutnick said on NBC's "Meet the Press."
Trump imposed new 25% tariffs on imports from Mexico and Canada last Tuesday, along with fresh duties on Chinese goods, after he declared the top three U.S. trading partners had failed to do enough to stem the flow of deadly fentanyl and its precursor chemicals into the United States.
Two days later, he exempted many imports from Mexico and some from Canada from those tariffs for a month, the latest twist in a fluctuating trade policy that has whipsawed markets and fanned worries about U.S. inflation and growth.
It was the second time in two months that Trump has walked back fentanyl-related tariffs on the U.S. neighbors.
"If fentanyl ends, I think these will come off. But if fentanyl does not end, or he's uncertain about it, he will stay this way until he is comfortable," Lutnick said.
White House officials say Canada and Mexico are conduits for shipments of fentanyl - which is 50 times more potent than heroin - and its precursor chemicals into the U.S. in small packages that are often not inspected.
Public data shows 0.2% of all fentanyl seized in the U.S. comes from the Canadian border, while the vast majority arrives via Mexico. In a concession to Trump, Canada appointed a new fentanyl czar last month.