Former U.S. Secretary of Treasury Lawrence Summers announced on X on Wednesday morning — when President Donald Trump‘s sweeping tariffs went into effect, including a 104 percent tariff on China — “Developments in the last 24 hours suggest we may be headed for serious financial crisis wholly induced by US government tariff policy.”
Developments in the last 24 hours suggest we may be headed for serious financial crisis wholly induced by US government tariff policy.
— Lawrence H. Summers (@LHSummers) April 9, 2025
Summers, a former director of the National Economic Council and president of Harvard University — and current OpenAI board member — added: “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.
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.
— Lawrence H. Summers (@LHSummers) April 9, 2025
“This could set off all kinds of vicious spirals, given government debts and deficits and dependence on foreign purchasers.”
Summers concluded: “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.”
By afternoon, Summers saw his advice heeded by the White House as Trump announced a tariff pause on most nations, except China.
Anonymous MAGA supporters are criticizing Summers on X and leaving comments that echoed Trump before he changed course.
They mocked worriers for a “sky is falling” alarmism, which they now find out Trump at least partly shared, standing down after vowing not to.
The MAGA loyalists also parroted Trump’s claim that “Tariffs are money paid to us by other countries. We are about to become rich beyond our wildest dreams.” Those surefire riches are now also on hold.
Trump did eventually what others hoped Congress would do. Professional financial advisor Dr. Rainer Ohler, managing partner of Sieber Advisors, asked Summers: “Any chance Congress stops this?”
The Brennan Center for Justice was asking the same question today in its article, ‘Will Tariffs Awaken a Sleeping Congress?’, which reminds readers that “The Constitution gives Congress — not the president — the ‘power To lay and collect Taxes, Duties, Imposts and Excises.'”
The Declaration of Independence charged King George III with “cutting off our trade with all parts of the world” while “imposing Taxes on us without our consent.”
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