Trump’s Tariffs Cause Many to Worry About Recession

Many of President Donald Trump’s approaches towards the global markets have caused worry about the American economy. America’s economy is facing the highest chance of falling into a depression since COVID-19 hit, due to Trump’s tariffs.

As of February 2025, Trump enacted multiple tariffs, raising tariff rates to historically high levels, applying to major trade partners. Many of these tariffs were targeted towards China, Canada, and Mexico. The tariffs were passed to encourage US consumers to buy more American products. However, tariffs are only making goods more expensive for US customers.

The tariffs mark a dramatic shift in U.S. trade policy, with implications for consumers, businesses, and international relations. While the Trump administration argues that the tariffs boost domestic industry and reduce reliance on foreign goods, economists say otherwise.

Joseph Stiglitz, an economics professor at Columbia University and Nobel Laureate in economics, stated, “Virtually all economists think the impact of the tariffs will be very bad for America and for the world; they will almost surely be inflationary.”

Recent Tariffs

On April 2, the president imposed heavy tariffs on nearly all foreign partners. The Trump Administration has been attempting to reach trade agreements to lower the tariffs of foreign countries. As of now, the United States has only reached agreements with Britain and Vietnam. Other countries that have not reached trade deals are expected to face extreme tariffs. Although, instead of July 9, the tariffs may only go into effect until August 1.

Last week, Trump sent many letters to foreign leaders threatening to impose higher tariff rates on August 1. According to statistics from the United States Census Bureau, the tariffs suggested from the letters are soaring above the global rates Trump first imposed on April 2, with the rates ranging from 10-50%. The letters also state that the tariff rates can be negotiated if other countries lower their regulations.

Trump also announced a significantly high tariff on metals, including a 50% tariff on all copper, steel, and aluminum imports, scheduled to take place next month. “Today we’re doing copper,” Trump said during a Cabinet meeting at the White House, “I believe the tariff on copper, we’re going to make it 50%.” On June 4, Trump raised the rate on steel and aluminum to 50%. Executives of Coldeco, one of the largest copper producers, have raised concerns over Trump’s tariffs on metals.

On Thursday (July 10), Trump told NBC News he planned to impose tariffs on all goods by 15-20% on most trade partners. “We’re just going to say all of the remaining countries are going to pay, whether it’s 20% or 15%.” Currently, Blanket tariffs are at 10%.

Reasons for the U.S. Economic Downfall

Economists have warned that Trump’s trade wars would likely hurt the American economy more than other countries.

Claudie Sahm, chief economist at New Century Advisors, told TIME magazine, “It will be difficult for the U.S. to avoid a recession if the tariffs stay at the level that’s been announced.”

Yuan Mei, assistant professor in the School of Economics at Singapore Management University, says, “The biggest loser of this is definitely the U.S. itself.”

In March, Moody Analytics showed that the probability that the US economy goes into recession over the next year rose from 33.2% to 47.6%. This is the highest reading since April 2020, when COVID-19 hit the US economy the hardest during the pandemic. Trump’s trade war risks the health of the world’s largest economy and risks a recession.

Mark Zandi, chief economist at Moody’s Analytics, said that consumer spending that had been growing steadily between 2022 and 2024 had slowed down in December. Mr. Zandi explained that this was a key sign of an economic depression.

On April 4, JPMorgan raised recession odds of 40% to 60% as the tariffs add worries to escalating trade wars and wreak havoc on global financial markets.

The RSM US Recession Monitor also predicted that the recession probability in the next year was 40%.

Joe Brusuelas, RSM chief economist, said, “That reflects the real economic and financial cost from the global economic reset that the Trump administration is intending to implement… If you want to rebalance the global economy to narrow the trade deficit, that entails some cost; it’s not free.”

As economists raise awareness of the possible recession, aggressive immigration control erodes the U.S. workforce, intensifying the long-term damage to productivity and growth.

Mr. Zandi says, “The growth in the foreign-born labor force has collapsed. That is a direct hit to the economy’s ability to grow more quickly.”

According to the National Skills Coalition, “Immigrants make up 19% of the U.S. workforce, meaning nearly one in five working people in our economy.”

Ultimately, the Trump Administration’s trade wars and immigration control strategies, said to strengthen the U.S. economy, backfire and raise concerns among many. Economists warn that tariffs and immigration control may trigger a recession and destabilize global markets.

Jayant Menon, a research fellow at ISEAS-Yusof Ishak Institute, says that even if Trump lowers the tariffs to some extent, the damage would have already been done: “The U.S. had thrown away decades of goodwill with its allies… When you come out and start penalizing your friends with tariffs based on a nonsensical formula… there’s no turning back.”

Sources:

https://www.nbcnews.com/politics/donald-trump/trump-tariffs-inflation-hasbro-ukraine-patriot-missiles-nato-russia-rcna218125

https://www.nbcnews.com/business/business-news/trump-says-will-impose-50-tariff-copper-imports-rcna217509

https://www.usatoday.com/story/money/2025/07/12/economy-slow-second-half-2025/84544138007/

https://www.nytimes.com/2025/07/07/us/politics/trump-tariff-deadline.html

https://www.npr.org/2025/07/12/nx-s1-5463818/trump-tariff-rate-letters

https://www.reuters.com/markets/jpmorgan-lifts-global-recession-odds-60-us-tariffs-stoke-fears-2025-04-04/

https://time.com/7275987/trump-tariffs-global-economy-recession-trade-war-asia-world-impacts/

https://www.nytimes.com/2025/07/13/business/economy/trump-tariffs-trade-deals.html

https://www.telegraph.co.uk/business/2025/07/13/us-recession-risk-five-year-high-trump-hammers-households/

https://www.census.gov/foreign-trade/balance/c0004.html

https://www.theguardian.com/business/2025/jan/31/trump-tariffs-us-economy

https://rsmus.com/insights/economics/rsm-us-recession-monitor.html