JPMorgan Analysts Warn that Trump’s Latest Tariff Measures Have Increased the Risk of Global Economic Recession from 40% to 60%
The long-term implementation of these tariffs could make the already fragile economic environment difficult to bear.
(Background: U.S. Stock Market Crash Sets Record, Nasdaq Composite Index Plummets 10%! Trump: No Negotiation on Tariffs Unless the U.S. Gets Something Amazing)
(Supplementary Background: Bridgewater’s Dalio: Six Major Effects and Four Variables of Trump’s Tariffs on the World Economy)
U.S. President Trump officially announced his latest tariff policy in the Rose Garden of the White House yesterday (3rd), declaring a 10% baseline tariff on all imported goods and implementing higher reciprocal tariffs on specific countries, effective on April 5 and April 9, respectively.
This move, central to his “America First” policy during his second term, has already shaken global financial markets over the past two days: stock markets plummeted, and gold prices soared, reflecting heightened investor concerns about economic prospects. In this context, two senior analysts from JPMorgan issued warnings, stating that this comprehensive tariff plan could push the U.S. and global economy to the brink of recession.
JPMorgan Analysts Seriously Warn of Recession Risks
Firstly, JPMorgan’s Chief Global Economist Bruce Kasman pointed out in a report released today (4th) that if this series of tariffs is implemented long-term, it could drag the U.S. and global economy into recession by 2025. He stated:
“The risk of a global economic recession has increased from 40% to 60%. These tariffs represent the largest tax increase on American households and businesses since 1968.”
Kasman further noted that the negative impacts of the tariffs would be amplified through retaliatory actions from trading partners, declining business confidence, and disruptions in supply chains. He estimates that this could push the U.S. inflation rate up by 1 to 2 percentage points, and reduce GDP by about 0.8% over the next 12 months. He emphasized:
“This is not only a blow to foreign countries but will directly erode the purchasing power of American households, leading to unpredictable chain reactions.”
At the same time, JPMorgan’s Chief U.S. Economist Michael Feroli commented today that Trump’s latest tariff measures represent a high-risk gamble. Although the tariffs could bring about $400 billion in annual revenue to the U.S., the cost will be higher inflation and reduced consumer spending, directly impacting American households and triggering economic recession:
“We may see a full-blown trade war, which will not only harm the U.S. economy but also drag down global growth.”
Is There Room for Retracting Trump’s Tariffs?
However, it is worth noting that after Trump announced the latest tariffs yesterday, Treasury Secretary Mnuchin stated that the U.S. would negotiate with its trading partners, seemingly implying that there is still room for adjustment (including tax rates and effective dates). However, multiple foreign media outlets reported today that the White House views this tariff as a response to a national emergency, rather than a bargaining chip.
Currently, Trump has also stated in interviews that he is open to negotiations, but the condition is that trading partners must provide something remarkable… How the U.S. tariffs will ultimately be implemented and the future prospects of the global economy are worth our continued attention.
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