Shoppers in downtown San Francisco
Photographer: Photo illustration by 731. Photo: David Paul Morris/BloombergWill Tariffs Drive the US Into a Recession?
Trump’s import levies and consumers’ growing pessimism are raising the risk of an economic contraction, analysts say.
President Donald Trump’s trade war sparked a sharp stock market selloff and revived fears that the economy could stall. Economists say the chance of an economic contraction has increased after Trump announced widespread tariffs that were steeper than many analysts were expecting. Another mounting worry, in the view of economists and market watchers, is the risk that a slowdown in growth will occur alongside accelerating inflation, a dreaded scenario known as stagflation.
During an event in the White House Rose Garden on April 2, Trump unveiled a 10% baseline tariff on global trading partners, with many countries — including China, Vietnam and those in the European Union — facing much higher levies. Prices of all kinds of consumer goods, including cars, electronics and clothing, are expected to rise if tariffs remain in place.