US economic growth could be under threat as JPMorgan warns of an increasing risk of recession, citing President Donald Trump’s trade policies as a key factor. The investment bank’s chief global economist, Bruce Kasman, stated that the likelihood of a recession in 2025 has risen to 40%, up from previous estimates of 30%.

Trade Tariffs and Economic Uncertainty

Kasman explained that Trump’s reciprocal tariff strategy—set to take effect in April—could further weaken the US economy by reducing investment appeal and straining trade relationships.

“Where we stand now is with a heightened concern about the US economy,” Kasman stated, adding that if tariffs are fully implemented, the risk of recession could surpass 50%.

At present, JPMorgan forecasts 2% GDP growth for 2025, though it has not yet revised its outlook. However, other major financial institutions, including Goldman Sachs (1.7%) and Morgan Stanley (1.5%), have lowered their growth expectations due to economic headwinds.

Stock Market Reacts to Tariff Announcements

Trump’s aggressive trade measures have shaken US stock markets, as investors struggle to determine whether the tariffs are a negotiating tool or a permanent shift in policy. Recent tariff hikes include:

• 25% tariffs on all imports from Mexico and Canada
• 20% tariffs on all Chinese goods (some increases delayed until April 2)
• 25% tariffs on steel and aluminum (effective immediately)

Trump has warned that starting April 2, all countries will face equivalent tariffs to those imposed on US exports. The EU and Canada have already responded with retaliatory measures, escalating trade tensions further.

Trump Dismisses Recession Concerns

Despite market volatility and warnings from financial experts, Trump dismissed concerns of a looming recession in a Fox News interview, characterizing the current period as a “transition phase”.

“We’re bringing wealth back to America,” Trump stated, defending his trade strategy as a necessary shift to protect domestic industries and ensure fairer global trade agreements.

What’s Next?

As April approaches, all eyes are on how Trump’s tariff policies will impact consumer spending, corporate investment, and international trade flows. With economists divided on the long-term consequences, the question remains: Will these policies boost American manufacturing, or will they push the economy into recession?