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White House mulls reversing some tariffs amid recession fears: Report

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The Trump administration is considering reversing some of US President Donald Trump’s signature tariffs against China as one of a range of potential measures to protect a weakening US economy from recession, The New York Times reported late Monday.

In public Trump and senior administration officials have been bullish about the prospects for the US economy following signs in the bond market last week that could herald a coming recession.

It was reported last week that officials were reluctant to make preparations for a coming recession amid fears that doing so could weaken confidence in the US economy and hasten a downturn.

But according to the Times, officials have privately weighed several potential measures to boost the economy should the economic situation noticeably worsen.

Read more: Trump is convinced there is a conspiracy to distort economic data and exaggerate the prospect of a recession

The Washington Post first reported on Monday that a payroll tax cut is one of the possible responses being considered, a move which a White House official though denied was on the table in remarks to Business Insider.

Other moves could involve scaling back some of Trump’s signature tariffs, reported the Times. Trump has imposed tariffs on hundreds of billions worth of Chinese goods, and attacked EU goods, albeit to a lesser extent, in a move to punish rival economies he claims are exploiting the US.

The report did not specify which tariffs officials are considering withdrawing, and the White House did not immediately respond to a request for comment from Business Insider.

US President Donald Trump and Chinese President Xi Jinping
Oliver Contreras/Getty; Greg Baker/Getty; Shayanne Gal/Business Insider

Some economists claim that Trump’s trade war with China, which has seen the US impose tariffs on $300 billion of Chinese imports, is among the causes of current economic instability.

The move is believed to have slowed down China’s economy and pushed Germany — Europe’s biggest economy — to the brink of recession.

Read more: Trump administration officials are said to be considering a tax cut for millions of workers in a bid to boost the economy and stave off fears of a recession

Economic experts are warning that it is US consumers who will pay a price for the tariffs, with a JPMorgan report on Monday warning that it will cost the average US household $1,000 per year when tariffs on an extra $50 billion of Chinese goods comes into effect into December.

Trump has claimed that is China that will bear the greatest cost of his trade war, but he is facing increasing pressure to close a new trade deal with the world’s second biggest economy.

Though Trump has insisted that warnings of a recession have been concocted by opponents and the media, the president has delayed imposing a new range of China tariffs until December 15 after advisers reportedly warned him that it would “ruin Christmas” for many US consumers because of its knock-on effect on the price of goods in shops.

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