60% chance of global recession due to tariffs, warns JPMorgan
What's the story
JPMorgan's Chief Economist Bruce Kasman has warned that the tariffs imposed by the Trump administration on US trading partners could lead to a global recession in 2025.
In a note titled "There will be blood," Kasman wrote, "The risk of recession in the global economy this year is raised to 60%, up from 40%."
He called these tariffs "the largest tax hike on US households and businesses since 1968."
Impact assessment
Tariffs could exacerbate economic downturn
Kasman further elaborated on the potential consequences of these tariffs, saying "the effect of this tax hike is likely to be magnified—through retaliation, a slide in US business sentiment, and supply chain disruptions."
His warning comes after several Wall Street firms predicted a US recession after President Donald Trump announced significant levies on goods imported from various countries.
Other economists, including those at JPMorgan, have acknowledged the potential impact but are waiting for further developments before adjusting their forecasts.
Market response
Global financial markets react to tariff announcement
The announcement of these tariffs has shaken global financial markets, with the S&P 500 suffering its worst day since 2020. The index lost $2.4T market value on Thursday.
Trump has said he would be willing to cut tariffs if trading partners could offer something "phenomenal."
Despite the potential economic shock from these policies, Kasman said in his note, "we are not making immediate changes to our forecasts and want to see the initial implementation and negotiation process that takes hold."