After President Donald Trump announced the new tariffs on April 2, many Americans wagered on the risks of the country entering a potential recession.
CBS News shared, “Economists with the investment bank put the odds of the economy entering a recession within the next 12 months at 45%, up from 35% in its previous forecast.” In addition, leading Wall Street figures have expressed their concerns that Trump’s agenda with tariffs might potentially lead to a decrease in economic growth. JPMorgan’s CEO Jamie Dimon shared that there are “many uncertainties surrounding the new tariff policy,” including potential retaliatory actions by foreign nations that could dampen investment and growth.
Yet, even with all these warnings from economists, recessions are difficult to predict, considering many believed a recession would hit after the COVID-19 pandemic, which proved untrue. However, after the current events since the inauguration, Senior Economist Mark Hamrick told USA Today, “There’s a growing consensus among economists that the risk of a damaging downturn has risen in the past three months, and even more in the past 24 hours.” Therefore, the tariffs should be of importance to American citizens as a potential ‘economic war’ could take place if Trump’s tariffs hit allied countries.
Importantly, U.S Treasury Secretary Scott Bessent appeared to dismiss the worries about the tariffs causing a recession. Commenting, “I see no reason that we have to price in a recession,” shared CBS News. Though the stock market suggests otherwise, considering the S&P 500 experienced a drop just two days after the tariffs were announced, when BlackRock CEO Larry Fink expressed that he believes the U.S may already be in a recession. However, the U.S. has yet to confirm that it has entered a recession.
Most recent tariffs have been implemented on Chinese imports, with a 145% tariff. The New York Times stated, “Goods from China now face a minimum tariff rate of 145 percent, a drastic increase on a country that supplies much of what Americans buy.” Regardless of some tariffs being paused for 90 days, the average U.S. rates for tariffs continue to be high, which only furthers the pressures and fears of an economic recession.
Additionally, a few signs grant a glimpse of the U.S. seeking to negotiate with China, especially when Trump has stated that China’s leader “has been a friend of mine for a long period of time,” wrote The New York Times. However, it is still something that is pending to be explored, considering China has stated that “it would ‘moderately reduce’ the number of American films imported into the country, as part of its escalating trade dispute with the United States.” The film industry would take a significant hit if the Chinese leader committed to the idea.
Americans remain uncertain about their future in the country, especially with inflation and a possible recession creeping near each day. The warning signs from industry professionals, the actions of allied nations, and administrations leave citizens in limbo about what will happen.