Tariff Tensions: Trump's Trade Policies Surge Risks of Global Recession

U.S. President Donald Trump's tariff hikes could be the largest U.S. tax increase since 1968, potentially increasing global recession risks. JPMorgan raised recession risk to 60%, citing retaliation and supply chain disruptions. The firm cautioned on long-term U.S. growth impacts from sustained trade and immigration policy actions.

In a recent analysis, JPMorgan stated that U.S. President Donald Trump's cumulative tariff hikes equate to the largest U.S. tax increase since 1968, calculating the rise at approximately 22%. This significant policy action has escalated concerns about a looming global recession, pushing JPMorgan to increase its global recession risk estimate to 60%, up from a previous 40%.

The banking giant warned that the effects of these tariffs could be exacerbated by potential retaliation, supply chain disruptions, and a broader sentiment shock. These factors could together magnify the negative impact on the global economy, leading to prolonged economic stagnation.

Additionally, the note from JPMorgan highlights a cautionary view on the long-term implications for U.S. economic growth, stemmed from persistent restrictive trade practices and dwindling immigration flows. Nonetheless, the firm suggests that current U.S. and global economic systems remain fundamentally solid enough to endure moderate shocks.

(With inputs from agencies.)