The tariffs announced this week by President Donald Trump have significantly increased the chances of a U.S. and global economic downturn, according to JPMorgan. “These policies, if sustained, would likely push the US and possibly global economy into recession this year,” wrote head of global economic research Bruce Kasman in a note late Thursday. The economist puts the odds of a recession this year now at 60%, up from 40% before the tariff rollout. Even if the global economy does avoid a recession, the U.S. may not be as lucky, Kasman said. “Scenario where rest of world muddles through a US recession possible but less likely than global downturn,” the note said. The U.S. tariffs are set to take effect over the course of the next week. The president and his aides have made conflicting statements about whether the levies can be negotiated down , which makes estimating their economic impact more difficult. How other countries respond to the tariffs is another variable to consider. Kasman’s note was published before China’s finance ministry announced that it would impose its own 34% tariff on U.S. imports in retaliation for the Trump administration’s decision. The trade war comes amid signs that the U.S. economy has already slowed somewhat in late 2024 and early 2025. Still, the unemployment rate was at 4.1% in February, which is relatively low by historical standards. “The current positioning of the US and global expansion points to limited vulnerability that might suggest a relatively mild downturn. But recessions are inherently unpredictable,” Kasman said. To be sure, the economist said he not changing his economic forecasts just yet to see how the implementation of these tariffs and subsequent negotiations play out.
