Trump Tariffs Spark US Recession Fears, Inflation Risks

Economists and central bankers have raised significant concerns about President Donald Trump's sweeping tariffs, warning they could drive inflation higher and push the U.S. economy toward recession. J.P. Morgan analysts predict tariffs could increase consumer prices by up to 1.5%, eroding real disposable income and threatening economic contraction, while CEO Jamie Dimon also sees recession as a likely outcome. Federal Reserve Bank of Chicago President Austan Goolsbee noted that both businesses and consumers are stockpiling goods ahead of tariff hikes, which may temporarily inflate economic activity before a potential summer slowdown. European Central Bank official Madis Muller cautioned that U.S. tariffs and increased German government spending could further stoke inflation risks in Europe. Critics argue that these tariffs disrupt global trade, strain international relationships, and disproportionately harm working-class Americans, with parallels drawn to the long-lasting effects of past recessions. China and other countries have retaliated with their own tariffs, deepening uncertainty and fueling volatility in global markets.