President Trump’s sweeping tariffs have ignited fierce debate over their potential to trigger a recession in the U.S. and abroad. The tariffs, which include a 10% baseline levy on most imports and higher rates targeting China (34%), Mexico (25%), and Canada (25%), represent the largest tax hike since 1982. Here’s how the economic fallout is unfolding:
– U.S. stock markets suffered their , with the S&P 500 dropping 15% since Inauguration Day and the Nasdaq 100 plunging into bear territory.
– Over in two days, mirroring crashes seen during the 2008 financial crisis and COVID-19 pandemic.
– Prices for everyday goods are spiking: , food prices jumped 4%, and the average household faces a .
– Small businesses with tight margins are particularly vulnerable. Stellantis announced due to tariff disruptions, signaling broader job market risks.
– The Heritage Foundation’s Andrew Hale warned that maintaining these tariffs could lead to a , derailing Trump’s broader agenda.
– Yale’s Budget Lab projects U.S. GDP growth will drop , with long-term economic output reduced by $180 billion annually.
– JPMorgan CEO Jamie Dimon cautioned that tariffs will and raise the risk of a downturn.
– China retaliated with , targeting agricultural and manufacturing sectors critical to Trump’s base.
– The EU and Canada are weighing countermeasures, risking a and “catastrophic damage” to the world economy.
– The White House claims tariffs will and address trade deficits exceeding $1.2 trillion.
– Advisers argue historical data shows tariffs had “minor effects on prices” and spurred reshoring during Trump’s first term.
Economists stress the outcome hinges on whether tariffs are temporary negotiating tools or a permanent shift. Steve Forbes urged a for negotiations to avoid a “self-induced economic nuclear winter”. Without swift de-escalation, the combined weight of consumer price hikes, corporate layoffs, and foreign retaliation could tip the U.S. and global economy into recession.
