The return of President Donald Trump to the White House has rekindled concerns about the stability of the American economy, by increasing the volatility of the global market and geopolitical turbulence that suffocates fears of a potential recession.
Despite the growing warnings of economic experts, Trump has doubled its aggressive tariff policies, targeting not only geopolitical rivals but also traditional American allies and the main economic partners.
Economic experts have repeatedly warned that Trump’s pricing policies could have large -scale negative impacts on the American economy. Holger Schmieding, head economist of Berenberg Bank, described Trump as “chaos and confusion agent”, criticizing the erratic approach to the president of commerce.
Register For TEKEDIA Mini-MBA Edition 16 (February 10 – May 3, 2025)) Today for early reductions.
Tekedia Ai in Masterclass Business open registration.
Join Tekedia Capital Syndicate and co-INivest in large world startups.
Register become a better CEO or director with CEO program and director of Tekedia.
“Trump’s zigzaging on prices shows that it has little idea of the potential consequences of its pricing policies,” Schmmeding told Squawk Box of CNBC.
However, Schmieding stressed that if a recession cannot be imminent, Trump policies undermine the long -term American growth prospects.
“What becomes more and more clear in the long term, Trump hurts the growth of trends, that is to say growth in the years beyond 2026,” he noted.
Schmieding warned that Trump’s business measures would likely lead to higher consumer prices and argued that the Federal Reserve (Fed) would have little reason to reduce interest rates under the unpredictable direction of Trump.
Prices targeting allies and key partners
Trump did not hesitate to impose prices on imports from countries traditionally considered as allies close to the United States. Its administration recently announced steep import rates on goods from China, Mexico and Canada, leading to a new wave of uncertainty in international markets. While the prices on American neighbors and the nearest trade partners were delayed until April 2, the temporary reprieve did not do much to calm the nerves of investors.
The confusion surrounding Trump’s trade policies has left the financial markets in shock. US stock contracts have dropped earlier this week, suggesting continuous volatility. Analysts of the intelligence unit on the US JPMorgan market have adopted a “downward” position, anticipating prolonged market turbulence and a “cramming” potential of American economic growth.
“We have already noted the negative impact that political uncertainty / exchange has had on household and companies’ expenses, so it seems likely that we can see a greater scale of this over the next month,” warned JPMorgan analysts. They advised the surveillance of key economic indicators such as unemployment rates and business layoffs for signs of a potential recession.
Economic data has mixed signals
Recent American economic data was a mixed bag, showing both resilience and emerging tension signs. The latest report on the non -agitated wage bill showed an increase of 151,000 jobs in February, in steps of 170,000 jobs provided by analysts. The unemployment rate reached 4.1%, which made concerns about a potential slowdown in the labor market, by CNBC.
Steven Blitz, US chief economist at TS Lombard, argued that the latest jobs did not indicate increased risk of recession. However, he warned that Trump’s policies could affect the economy unpredictably.
“Trump’s actions can still distort the economy anyway, including an implosion of capital expenditure,” said Blitz.
The GDPNOW TRACKER of the Federal Bank of the reserve of the reserve has provided for a 2.4% contraction in American GDP for the first quarter, increasing the spectrum of a technical recession if the economy is narrowed for two consecutive quarters. Despite this, the White House did not indicate any change in progress on the prices.
Trump remained firm in his pricing strategy, dismissing the recession of recession of economists and market analysts. In an interview on Fox News by Sunday Morning Futures, Trump described current economic conditions as a “transition period” and suggested that his policies were part of a broader effort to bring wealth to the United States.
“There is a transition period because what we do is very large. We bring the wealth in America. This is a great thing, “he said. “It takes a little time. It takes a little time. Trump did not exclude the possibility of a recession, but suggested that short -term economic pains were necessary for long -term gain.
However, Trump’s challenge could turn against him if his policies trigger the slowdown even that he seeks to avoid. Many have argued that its prices could lead to stagflation – a dangerous mixture of high inflation and high unemployment – for the Fed to maintain stable interest rates instead of cutting them to stimulate growth.
Analysts adopt a lower perspective
Trump’s refusal to move away from his pricing policies left analysts who prepare for continuous volatility on the market. JPMorgan analysts expressed their concern about the potential climbing of the trade war, warning that this could lead to Canada and Mexico to the recession and seriously undermine the growth of American GDP.
“Given the absence of a potential end to this escalation, the wait is that the prices of this magnitude will lead to both Canada and Mexico in a recession,” warned JPMorgan, explaining their passage to a “tactically down” market. They noted that prolonged prices could lead to a drop in profits, forcing analysts to revise the end -of -year forecasts.
Global impact: Risks of Commerce and Investment
The potential repercussions of Trump prices extend beyond American borders. Business managers and economists have expressed concerns that higher prices could increase in inflationary pressures in the United States, consumers likely to endure higher prices on imported goods. They also warn that investment, job creation and economic growth could all suffer while businesses and consumers are preparing for a period of economic unpredictability.
Trump’s approach to trade has also set diplomatic links, affected countries that have imposed or envisaged reprisal rates. This could create a tit-form scenario, amplify economic risks and another unstable world markets. Economists fear that if the trade war is intensifying, the effects could wave by supply chains, disturbing technology industries to agriculture.
