Trump’s tariff agenda could gut U.S. retail, crush jobs, and ignite a recession deeper than any since the Great Depression, economist Peter Schiff warns.

Peter Schiff: Tariffs Will Gut Retail, Slam Banks, and Spark 50% Market Drawdown

Economist and gold advocate Peter Schiff raised alarm on April 8 through social media platform X, predicting that the continuation of Donald Trump’s tariff policies would decimate the U.S. retail industry and trigger a deep economic downturn. The chief economist and global strategist at Euro Pacific Asset Management warned that trade barriers would create a domino effect of bankruptcies, layoffs, and commercial loan defaults. He stated:

If Trump’s tariffs stay in place, there will be a wave of retail bankruptcies.

Schiff explained that as struggling retailers shutter locations and slash jobs, commercial landlords would be left with vacant properties, and banks would be burdened with defaulted retail loans.

The economist also outlined how consumer prices could spike beyond the added costs of tariffs, due to shrinking sales volumes and unchanging overhead. “In the end, the U.S. will have far fewer retail businesses left. They will sell a lot less merchandise, but they will do so at much higher prices. Prices will likely rise by more than the tariffs as retailers have to cover their fixed costs on lower sales volumes. But a collapse in retail sales will lower our trade deficit, which is Trump’s goal. All the goods Americans can no longer afford to buy will no longer be imported. We win.” Although Schiff acknowledged that falling imports would reduce the U.S. trade deficit, he framed it as a pyrrhic victory achieved through weakened consumer spending.

In earlier comments on April 7, Schiff warned that financial markets remain dangerously overvalued and unprepared for the kind of recession he anticipates. He stated:

The stock market hasn’t come close to pricing in the recession that awaits if tariffs stay in place. Even with the drop the market is still expensive assuming recession is avoided. Since this would be the worst recession since the Great Depression, even a 50% drop isn’t enough.

The gold advocate also criticized Trump’s rationale behind the tariffs, stating bluntly: “Trump’s tariffs are a misguided solution.” According to Schiff, the real issue behind trade deficits is not unfair global practices but fundamental weaknesses in the U.S. economy itself.

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