Economists are beginning to forecast a significant economic slowdown this year as the effects of President Donald Trump’s universal tariffs on nearly all of the United States’ trading partners become apparent.
High Frequency Economics’ top U.S. economist, Carl Weinberg, believes the recession has already started. Weinberg believes that the economy would collapse at a negative 4.5% rate in the second quarter, which has barely begun, since he sees it falling out of bed.
In the last half of the year, Weinberg anticipates more economic deterioration. It is anticipated that the U.S. economy will grow at a rate of roughly 2% annually during the January–March quarter.
“A severe fall in the economy is imminent. Weinberg referred to the tariff plan as “the Trump Job Destruction Order” and predicted a spike in layoffs.
Economists are aware that tariffs will cause prices to rise and expenditure to fall. In the end, the tariffs are a tax that will be deducted from business earnings and household incomes. Trump’s tariff proposal “is the largest one-day tax hike in history,” according to Weinberg.
Last week, starting on April 5, the White House imposed a minimum 10% duty on the majority of imported items. On Wednesday, much higher country-specific duties are scheduled to take effect.
According to J.P. Morgan senior U.S. economist Michael Feroli, the economy will enter a recession in June, with the weakest months occurring in the middle of the year. According to him, the anticipated pressure on investment spending will take time to manifest, therefore the recession won’t begin earlier than that.
A week earlier, Goldman Sachs economist Alec Phillips increased his 12-month recession likelihood from 35% to 45%. The odds of a recession are about 15% during normal times.
Meanwhile, Phillips reduced his 2025 GDP prediction from a 1% annual pace to a 0.5% rate.
“The combination of larger tariffs, greater policy uncertainty, declining business and consumer confidence, and messaging from the administration indicating greater willingness to tolerate near-term economic weakness in pursuit of its policies increase downside risk,” Phillips stated.
