UCSB Economics Star Peter Rupert: Trump Trade War Pushing U.S. Towards Recession
The Executive Director of the UCSB Economic Forecast drops by Newsmakers for a conversation packed with insights, revelations and erudite prognostications
Peter Rupert, UCSB Professor of Economics, says that Donald Trump’s inconstant tariff policy is based on a “fallacy” and is likely to engender a global recession, unless the White House changes course.
An authority on macroeconomics who also directs the UCSB Economic Forecast Project, Rupert during an interview dismissed as more wishful thinking than evidence-based policy Trump’s claim that his trade war will restore U.S. manufacturing.
He also said that the constant changes about tariffs that have been announced since Trump declared a “Liberation Day” trade war on April 2 have created a risky and uncertain business climate that discourages investment.
“If the tariffs stay at the levels they are now, I'm betting we'll go into a recession for sure,” Rupert said on this week’s edition of Newsmakers TV.
“There is a fallacy,” he added. “If what you’re doing is putting a tariff on steel to save some steel workers’ jobs, you’re hurting everybody else in the economy who’s trying to buy things that are made of steel, like cars, like computers, whatever it is that’s being made with some steel product, we’re being hurt more.”
Rupert, referencing a just-out 2025 forecast update from the International Monetary Fund, said that, “they had forecast theU.S. would grow something like 2.5 to 2.7 percent, which is very strong growth. And now it's downgraded to 1.8 percent. That's not recession territory, but we're certainly going to slow down.”
A former, longtime senior analyst at the Federal Reserve Bank of Cleveland, Rupert delivered a blistering critique of the “daily rollercoaster” of economic news, as Trump since his inauguration has imposed, withdrawn, amended, enlarged, and reduced tariffs, seemingly on a whim, on countries from China to the McDonald Islands, a remote chain of barren outcroppings owned by Australia inhabited only by penguins.
“That’s very upsetting and it’s almost criminal - I mean people just can’t plan,” he said of the capricious process of policy-making. “So let me use a technical term if that’s okay, please. The whole thing’s a shit show.”
In our conversation, Rupert also:
Forecast that California is “going to be hurting a lot” amid the trade war, and scoffed at Gov. Newsom’s recent crowing about the size of the state’s economy, asking “could we have even grown bigger had we had certain policies in place that allowed us to grow bigger?”
Previewed the upcoming UCSB Economic Forecast Project, scheduled for May 12 at the Granada, with a program featuring former Federal Reserve President Jim Bullard’s out-of-office take on the economy and UCLA Professor Lee Ohanian’s presentation on housing and homelessness in California.
Took a dim view of the Santa Barbara City Council’s recent 4-to-2 vote to slap more restrictions on landlords, saying the move will only worsen the housing shortage, as he pointed to the failure of such policies in big cities.
“What is the incentive of a builder who might want to build some apartments?” he said. “The incentives are, ‘I’m not going to do it.’
“And by the way, we’ve seen what happens in Chicago and New York and the South Bronx when we have stopped people from renovating and putting money into their apartments,” he added. “So what we’re really doing is, we’re pretty much stopping new construction, which would have helped in the affordability side of things.”
“It’s a community problem, not a landlord problem,” Rupert said. “So all of a sudden we’re attacking one group of people, landlords, making them suffer to solve a community problem. So that’s a big issue for which we need to figure out a community solution that’s not just hitting landlords.”
Check out our conversation with Dr. Peter Rupert via YouTube below or by clicking through this link. The podcast is available on Apple, Spotify and on Soundcloud here. TVSB, Channel 17, airs the show every night at 8 p.m. and at 9 a.m. on weekends. KCSB, 91.9 FM, broadcasts the program at 5:30 p.m. on Monday.
For years, Peter has been the voice of erudition, data and impeccable reason. The question for Santa Barbara-land is whether anyone (City Council!) is listening? The question is, of course, rhetorical :)