Top economist warns 'crisis will get worse' if Donald Trump follows through on his threat

The affordability crisis in the United States reflects a systemic issue in which the costs of housing, food, healthcare, childcare, and energy increase faster than incomes. As a result, around one-third of middle-class households are now struggling to meet their basic needs, and since last year, it has become increasingly difficult for low-income families to tackle President Donald Trump's tariffs. Recently, Trump signed an executive order imposing potential tariffs of up to 25% on countries that conduct business with Iran, reaffirming a national emergency. However, Peter Schiff, Chief Economist and financial commentator, has sounded the alarm, labeling it a disastrous move.

"Trump threatened to hit Americans with 25% tariffs on imports from countries that directly or indirectly do business with Iran. Since China does business with Iran and nearly every country does business with China, if Trump follows through, the affordability crisis will get worse," he warned on X. "Countries don't need to lend money to us to buy their stuff. We need them to make the stuff, then lend us the money to pay for it," the CEO of Europac added.

Schiff's caution is indicative of a broader institutional defect following the "Secondary Tariff" framework on February 6. According to an analysis released today by the Tax Foundation, Trump's 2026 tariff plan would result in an average annual tax hike of $1,300 for each American household. Analysts at Goldman Sachs estimate that by mid-2026, these tariffs would increase inflation by 1%.

In a heated meeting on February 4, House Democrats, including Representative Maxine Waters, called the approach a "war on consumers." The Council on Foreign Relations also issued a warning, stating that domestic affordability is seriously threatened by the addition of these levies to the current trade war prices, Bitcoin.com News reported.

Meanwhile, Trump, who has been largely dismissing the affordability crisis as a Democratic 'con job,' had a social media meltdown after Schiff questioned his policies in December. “Why would Fox and Friends Weekend (of all things?) put on a ‘Stockbroker’ named Peter Schiff, a Trump-hating loser who has already proven to be wrong,” the president wrote on his Truth Social, before adding, “Either the show made a mistake, or it is heading in a different direction." Schiff responded with a scathing comment on X, saying, "Since Pres. Trump called me a jerk and a loser for claiming that prices are still rising when he insists they're coming way down. I challenge him, or his designee, to a debate on the U.S. economy and the efficacy of his policies. If I'm as wrong as he says I am, let him prove it."

As of early 2026, about 96% of U.S. tariffs are effectively paid by Americans, showing up as higher prices for importers and consumers, not by foreign exporters. Tariffs generate about $200 billion in revenue annually and act as a sizable consumption tax, Fox5Atlanta reported.

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