Trump Tariffs Raise Recession Fears for 2025
Recent analyses from major financial institutions have heightened concerns about the potential for a recession in 2025, primarily driven by the reintroduction of tariffs by former President Donald Trump. JPMorgan analysts have warned that these tariffs could significantly increase the risk of an economic downturn, as reported by Business Insider. The tariffs, aimed at rectifying trade imbalances, have been met with skepticism regarding their effectiveness and potential economic fallout.
CNN has echoed these concerns, highlighting international reactions to the tariffs and their possible impact on global trade dynamics. Bloomberg further detailed the perspective of a strategist who accurately predicted previous trade shocks, now forecasting additional stock market losses due to the new tariff policies.
The White House has officially announced these tariffs as part of a broader strategy to address persistent U.S. trade deficits. Critics argue that such measures could lead to retaliatory actions from trading partners, further complicating the global economic landscape. As the debate continues, the economic community remains on high alert for signs of an impending recession.
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Is the USA going into a recession?
A March CNBC Fed Survey put the probability of recession at 36%, up from 23% in January. J.P. Morgan's chief economist put the odds at 40%. You can expect those numbers to rise following Trump's latest tariff announcement.
What do economists say about the tariffs?
More certain is that Mr. Trump's tariffs will boost inflation, noted Gregory Daco, chief economist at EY. Consumer prices could accelerate by 1 percentage point by year-end, he added, which would boost the inflation rate close to 4% from its current level.
How are tariffs collected in the US?
Customs agencies collect tariffs on behalf of governments. Agents review paperwork, perform audits and collect levies and penalties. The money is collected at the time of customs clearance and deposited into the Treasury Department's General Fund.
What causes a recession?
Recessions can be the result of a decline in external demand, especially in countries with strong export sectors. Adverse effects of recessions in large countries—such as Germany, Japan, and the United States—are rapidly felt by their regional trading partners, especially during globally synchronized recessions.
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