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The US economy faces growing uncertainty as fears of a "Trumpcession”—a recession driven by Trump’s unpredictable policies—intensify. Market volatility, weakening consumer confidence, and business disruptions from tariffs and immigration policies are fueling concerns. The risk of an economic downturn is becoming harder to ignore.
To learn more about the possible impacts of a “Trumpcession,” click through now.
"Trumpcession" is the term economists are using to describe a potential US recession triggered by Trump’s unpredictable economic policies, particularly his tariff trade wars.
Economists are concerned that President Trump's erratic behavior and approach to tariffs, immigration, and government spending cuts will increase the likelihood of a 2025 recession.
President Trump's tariff approach has been extremely inconsistent, with reversals that have left investors and businesses in a state of uncertainty regarding future trading conditions.
One of the most recent economic policies was a new round of reciprocal tariffs on trading partners worldwide, announced on April 2—a day he called "Liberation Day." Hours after the announcement, the US stock market plummeted. Financial experts have been warning about the consequences of the escalating trade war on the national economy, potentially pushing the US toward a recession.
Investors are responding negatively to the president’s economic policies, leading to increased volatility and declining confidence in economic growth.
Stock markets in the US are falling sharply due to the fears investors have in terms of tariffs, inflation, and slowing economic growth. US economic instability is spreading globally, with European stock markets also taking a hit.
Asian stock markets plunged to their lowest levels in decades after President Trump unveiled the new tariffs, sparking widespread investor anxiety. Among the most severe measures was a 104% tariff on Chinese goods. The sell-off underscores concerns that the escalating trade tensions could upend global supply chains, fuel inflation, and push the global economy toward a serious slowdown.
The US dollar has weakened, giving up all the value it had gained since Trump’s election, as growing fears of a Trumpcession lead investors to move their money into more stable foreign currencies.
The Nasdaq and S&P 500 have fallen significantly, with the Nasdaq approaching correction territory, which is defined as a decline of 10% or more from its recent peak, signaling increased investor caution and market instability.
In January, consumer spending unexpectedly dropped. This could signal that economic uncertainty is causing many people to cut back on purchasing goods and services.
February saw the biggest decline in consumer confidence in four years, indicating that people are losing faith in the economy.
Target and Walmart have reported that tariffs and inflation are driving people to spend less.
Further worsening inflation concerns is the fact that businesses are using tariff uncertainty to justify raising prices.
President Trump started and is continuing an aggressive trade war. It's proving more damaging than anyone could have predicted, causing weaker growth and higher inflation.
The US trade deficit hit a record US$131 billion at the beginning of 2025 as businesses rushed to move goods before new tariffs took effect.
After receiving some backlash, President Trump postponed some of the tariffs; however, they're still set to take full effect starting April 2.
Even President Trump himself doesn't rule out the possibility of a recession. This adds to fear and a further decline in the stock market.
The job market is currently in trouble; layoffs are increasing, hiring is slowing, and inflation is picking up speed.
This uncertainty surrounding President Trump's policies is causing businesses to slow hiring, which could lead to weakened job growth.
Immigration policies supported by Trump are making it harder for certain industries, namely agriculture, construction, and healthcare to find workers, thereby impacting productivity.
There could be a ripple effect after the federal government layoffs. This could lead to reduced consumer spending and slower job growth in other industries.
The investment bank Goldman Sachs raised its recession probability from 15% to 20%, citing concerns over tariffs and inflation.
Additionally, Morgan Stanley cut its 2025 GDP forecast from 1.9% to 1.5% due to Trump's trade policies.
The Atlanta Fed’s GDPNow model suggests the US economy could shrink by 2.4% in the first quarter of 2025.
President Trump has acknowledged the possibility of an economic downturn and is referring to it as a "period of transition." In this "period" we could see higher inflation.
President Trump had an opportunity to reassure investors during a Fox News interview, however, he chose to instead double down on his economic policies.
The Euro and the Pound hit their highest levels since Trump’s election as investors moved away from the US dollar.
Many analysts are concerned and debating just how much of a negative impact Trump's policies will have on the US and global economy in years to come.
Jerome Powell, chair of the US Federal Reserve, acknowledges rising uncertainty but remains cautious, noting that sentiment readings haven’t always predicted economic downturns.
Sources: (CNN Business) (The Guardian) (Market Watch) (Reuters)
See also: As trade war escalates, Trump backs billionaire Musk
The ‘Trumpcession’ and its implications for the US economy
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The US economy faces growing uncertainty as fears of a "Trumpcession”—a recession driven by Trump’s unpredictable policies—intensify. Market volatility, weakening consumer confidence, and business disruptions from tariffs and immigration policies are fueling concerns. The risk of an economic downturn is becoming harder to ignore.
To learn more about the possible impacts of a “Trumpcession,” click through now.