How Trump’s Tariffs Could Lead to a Global Recession

Miranda Jeyaretnam

Source Link

Economists have warned that U.S. President Donald Trump’s trade war, which kicked into its highest gear yet on Wednesday, is likely to hurt Americans more than it will any other country.

Taxing all imports will lead to greater costs for U.S. businesses, which will then raise prices for U.S. consumers, and may well bring the U.S. into a recession, a sustained economic decline.

“It will be difficult for the U.S. to avoid a recession if the tariffs stay at the level that’s been announced,” Claudia Sahm, chief economist at New Century Advisors, recently told TIME.

“The biggest loser of this is definitely the U.S. itself,” says Yuan Mei, assistant professor in the School of Economics at Singapore Management University.

But that doesn’t mean there won’t be a range of knock-on effects that will ripple across the world.

In the last week, J.P. Morgan raised its forecast of the global economy entering a recession by year end from 40% to 60%.