Growing backlash: Harris, Yellen, business groups challenge Trump's tariffs

As U.S. President Donald Trump doubles down on sweeping tariffs against major trading partners, a growing chorus of opposition is emerging from across the political and economic spectrum in the U.S. From former Vice President Kamala Harris and former Treasury Secretary Janet Yellen to state governors and business groups, critics warn that Trump's tariff policies are fueling economic uncertainty, hurting American consumers and businesses, and pushing the country toward a potential recession.

Harris delivered her first major speech since losing the 2024 presidential election to Trump in San Francisco on Wednesday. In her speech, she called Trump's tariff policy "reckless," adding that Trump's trade war is the "greatest man-made economic crisis in modern presidential history."

Harris stated that the Trump administration and his allies are "counting on the notion that fear can be contagious. They are counting on the notion that if they can make some people afraid, it will have a chilling effect on others."

Harris argued that the tariffs instituted by the Trump administration have "hurt workers and families by raising the cost of everyday essentials" and are paralyzing "American businesses, large and small, forcing them to lay off people, to stop hiring or pause investment decisions."

She later added that "the tariffs, as I predicted, are clearly inviting a recession." 

'Increasing recession risk'

Trump unveiled steep "reciprocal" tariffs on many countries on April 2, which sent shockwaves through the markets. While he later paused most tariffs for 90 days, 145 percent levies on many Chinese goods have remained in place. His tariff policy has faced broad criticism both within the U.S. and internationally.

In an interview with Financial Times on Thursday, Janet Yellen warned that Trump's wide-ranging levies on trading partners risked tipping the U.S. into recession.

"(The tariff strategy) will have tremendously adverse consequences for the United States, for consumers, for the competitiveness of firms that rely on imported inputs," Yellen, who also served as the Federal Reserve chair, said. She noted that about 40 percent of goods imported into the country were inputs for domestic production.

She added, "I'm not yet ready to say that I'm forecasting a recession, but certainly the odds have gone way up."

Yellen also pointed out that the tariffs could have a particularly damaging effect on the U.S. clean energy sector, given that the U.S. is "highly dependent on China for most of the critical minerals that go into clean energy technologies, batteries and the like." "And by putting enormous tariffs on them, I think we potentially hobble industries that could have a chance,”she said.

States sue Trump administration

In response to the tariffs, California, in April, took the lead to file a lawsuit challenging Trump's authority to unilaterally enact tariffs, saying it is unlawful and has brought chaos to the American economy.

Soon after, a dozen states sued the Trump administration over the tariff policy. The states listed as plaintiffs in the lawsuit were Oregon, Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada, New Mexico, New York and Vermont.

Arizona Attorney General Kris Mayes called Trump's tariff scheme "insane." She said it was "not only economically reckless. It is illegal."

While legal challenges could drag on for months or even years, small businesses in the U.S. cannot afford to wait.

Late Wednesday, the U.S. Chamber of Commerce urged the Trump administration to immediately implement a "tariff exclusion process" in order to keep the U.S. economy from falling into a recession.

In a letter sent to Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer, the group asked trade officials to automatically lift tariffs on all small business importers and on all products that "cannot be produced in the U.S."

The organization also called on the Trump administration to establish a process for businesses to quickly obtain tariff exclusions if they can demonstrate that import duties pose "significant risks to U.S. employment."

"We are deeply concerned that even if it only takes weeks or months to reach agreements, many small businesses will suffer irreparable harm," the Chamber's CEO, Suzanne Clark, wrote in the letter.

Hurting businesses around the world 

In the past days, the U.S. retail giant Amazon, which serves as a platform for small and medium-sized businesses, considered displaying the tariff portion of an item's price next to its total listed price on its website as tariffs increased the costs of goods. However, the plan was quickly scrapped after the White House targeted the company, with Trump personally contacting Amazon founder Jeff Bezos on Tuesday morning.

The U.S.'s increasing use of tariff barriers is triggering significant economic turmoil across the country and around the world, particularly in sectors directly tied to manufacturing and physical goods, such as retail and industrial materials.

These industries are facing escalating production costs, which not only suppress consumer demand but also reduce corporate profits, creating a dangerous cycle – exacerbating unemployment risks and hindering global economic growth.