US President Donald Trump’s decision to impose a series of new tariffs on America’s trading partners has sent shockwaves through the global economy, with many economists warning of a potential recession.
The tariffs, which include a 10% baseline tariff on all goods imports into the United States and even higher tariffs on products from about 60 economies, are expected to have a devastating impact on economies around the world. China and the European Union are among the hardest-hit trading partners, facing new duties of 34% and 20% respectively.
Analysts warn that the tariffs will cause prices in America to surge, adding close to 2% to the Consumer Price Index in 2025. This would be the largest tax increase in recent decades, with a cumulative effect of around $660 billion. The impact on inflation will be substantial, exacerbating an already fragile economic situation.
The US economy is not immune to the effects of these tariffs. A recession is a likely outcome for both the US and the world this year, according to JPMorgan. The overall economic “shock” from Trump’s tariffs will be exacerbated by any retaliatory measures imposed by America’s trading partners on US goods.
Other economies are expected to take a hit on several fronts. A recession or slowing economic growth in the US would cause mighty American consumers to pull back on spending, which in turn would lower demand for foreign goods. This could lead to mass job losses, bankruptcies and foreclosures, making Trump’s stated ambition of “Make America Wealthy Again” seem further away.
The EU has already responded to Trump’s tariffs by unveiling countermeasures worth up to 26 billion euros ($29 billion), including tariffs on boats, bourbon and motorbikes. However, other governments may not be as circumspect in their response.
Economists warn that the global economy will still probably avoid a recession this year, but growth could fall below 2%, making it the weakest annual growth rate since the global financial crisis, excluding the pandemic period. The impact of Trump’s tariffs on foreign economies is expected to be significant, with prices rising and demand for goods decreasing.
As the situation continues to unfold, one thing is clear: the world is watching America’s economy closely, and the potential fallout from Trump’s tariffs will have far-reaching consequences for economies around the globe.
Source: https://edition.cnn.com/2025/04/04/economy/recession-trump-tariffs-intl/index.html