Is a recession coming to the United States?
The US investment bank JP Morgan is predicting a recession in the United States and other countries around the world this year if the tariffs imposed by Trump on Wednesday remain in place. According to the company's calculations last Thursday, the tariffs will increase the price of goods in the United States. The price index for consumer goods in the country may increase by about 2 percent in 2025.
JP Morgan analysts say that this year's tariff increase should be seen as a tax increase of about $ 660 billion in the United States. This amount of tax increase is the highest in the past few decades. It will have a significant impact on inflation. In addition, if trading partners take countermeasures against imports of US products to retaliate against the tariffs imposed by Trump, the 'push' on the economy will be even more intense.
In the meantime, retaliation against Trump's tariffs has begun. China has condemned the US action. Beijing has called it 'unilateral oppression'. They have announced a 34 percent tariff on US goods as a countermeasure. The European Union, the largest single market for US goods, has also warned of retaliatory measures. French President Emmanuel Macron has called on European companies to suspend planned investments in the United States.
Trump has been making a slogan since the 2024 presidential election. That is, he will ‘make America rich again’. If his tariffs now cause a major decline in the US economy, then there could be widespread unemployment, bankruptcies and defaults on debt. If this happens, it would be the opposite of Trump’s goal of ‘making America rich’.
Paul Donovan, chief economist at UBS Global Wealth Management, said that the US president can still withdraw or reduce these tariffs, but if the tariffs take effect, it will slow down the pace of the US economy. In a research paper published on Thursday, Deutsche Bank economists also said that there is a risk of an economic recession in the US.