As warning signs flash across global markets, economists are sounding the alarm about a looming recession triggered by Trump’s proposed tariffs. The numbers don’t lie. OECD just slashed its 2025 global growth forecast to 3.1%. JPMorgan isn’t feeling optimistic either, bumping up US recession probability to 40%. Yikes.
These aren’t just random predictions. Goldman Sachs cut their 2025 US growth forecast to a measly 1.7%, matching exactly what the Federal Reserve is projecting. Not great. Meanwhile, Mexico’s heading for a deep recession next year. Wonder why?
Tariffs. They’re expensive. Really expensive. The proposed IEEPA and Section 232 tariffs could shrink US GDP by 0.4% and kill 309,000 jobs. We’ve seen this movie before. The 2018-2019 tariffs already reduced long-term GDP by 0.2% and erased 142,000 jobs. But who’s counting?
Tariffs crush growth and kill jobs – we’ve already seen the damage. How much more can we afford to lose?
US imports could drop by 15%, according to Bloomberg Economics. That’s a lot. The government might rake in $100 billion in extra tax revenue, but at what cost? Car prices jumping $3,000. Gas prices surging 50 cents per gallon in the Midwest. Sounds like a great deal!
These tariffs would impact over $1 trillion of US imports. Canada and Mexico are particularly vulnerable, with trade making up 70% of their GDP. The Bank of Canada has explicitly stated that monetary policy cannot offset the negative impacts of trade wars. No wonder their currencies are tanking – the peso down 30%, Canadian dollar down 8%.
The math is simple. Steel-consuming jobs outnumber steel-producing jobs 80 to 1. States like New Mexico, Texas, Ohio, and Maine face serious export risks to our neighbors. Trade wars could significantly disrupt the global supply chains for critical minerals essential for clean technology manufacturing.
Long-term? Even worse. The US could permanently lose global market share as countries diversify away from American trade. Canada and China are already looking elsewhere.
Some economists estimate scaling back tariffs could create 145,000 jobs by 2025. Instead, escalation might cost 732,000 jobs and reduce household income by $6,400. But hey, who needs jobs and money anyway?
