The United States is held at an economic crossroads, fears of recession increasing strongly while President Donald Trump doubles his aggressive tariff policies. A deutsche Bank survey is now chancesing an economic slowdown in the United States 43% over the next 12 months.
While growing trade tensions continue to shake up markets, companies and global supply chains, many experts think that the situation is about to get worse.
Far from showing any sign of decline, Trump increases his trade war even more. He has just threatened to impose a 25% rate on countries buying Venezuelan oil, a decision that could have significant economic consequences. The latter threat amplifies the concerns that its strategy focused on prices, intended to put pressure on Venezuelan President Nicolás Maduro, pushes the United States closer to a self-inflicted recession. As global markets react, economists warn that Trump’s approach is dangerously destabilizing.
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Trump has increasingly armed prices to achieve foreign policy and the economic objectives of his administration. From China to Europe, Mexico in Venezuela, he used the threat of prices to force compliance, punish adversaries and protect the interior industries.
While his supporters argue that these tactics give the American lever effect in commercial negotiations, economists warn that they could turn against him, which increases costs for American consumers and businesses while slowing global economic growth.
As the prices increase, the risk of stagflation – a scenario where growth slows down while inflation remains high – presents a real possibility. Many economists have long warned that Trump trade policies could ultimately push the United States into the recession. His last pricing threat of Venezuelan oil only reinforces this argument.
Can the Fed prevent a crisis?
The president of the federal reserve, Jerome Powell, tried to calm the fears, insisting that the economy remains “strong global”. However, his own forecasts suggest that growth slows down. After the FED’s two-day political meeting last Wednesday, officials lowered their GDP growth estimate for only 2025 to only 1.7%, which, excluding COVVI-19 economic collapse, would be the slowest rate since 2011.
At the same time, basic inflation should now reach 2.8%, well above the target target of the Fed. The risk is that the FED can have trouble balance economic growth and inflation control, especially since prices increase costs between industries. While Powell rejected comparisons with the era of stagflation in the 1980s, some experts think that the United States is dangerously close to a similar economic situation, especially if Trump follows his growing commercial threats.
“The recent correction of the equity market has been punctuated by the” uncertainty shock “of the pricing policy constantly evolving, investors concerned about transforming themselves into a slowdown or even a recession,” said Morgan Stanley in a note on Monday. “What is really at the heart of the enigma, however, is that the United States could be at risk for access to stagflation, where growth slows down and inflation remains sticky.”
Powell, however, rejected these concerns. “I wouldn’t say that we are in a situation at a distance comparable to it,” he said.
Markets and economists sound the alarm
The financial markets responded with increasing anxiety to Trump’s trade policies. Doubleline Capital’s Douffrey Gundlach Bond Market Expert recently told CNBC that he saw the chances of an American recession at “50% to 60%”. Barclays analysts noted that “market-based measures comply with a modest slowdown in the economy”, although the company expects a growth rate this year only 0.7%, barely above the recession.
The UCLA Anderson Management School, a highly respected economic forecasting center, published its very first “recession” due to Trump’s pricing war. Economist Clement Bohr, from UCLA Anderson, warned that Trump’s actions could directly lead to a slowdown. “The slowdown could occur in a year or two, although it is entirely avoidable if Trump reduced his pricing threats,” he said.
Bohr also issued a striking warning on the dangers of a deeper crisis. “This watch also serves as a warning to the current administration: pay attention to what you want, because if all your wishes come true, you may very well be the author of a deep recession,” he wrote. “And it may not be just a standard recession that is accompanied by existence, but stagflation.”
Trump shows no signs of stopping
Despite these warnings, the Trump administration continues to threaten new prices, creating greater economic uncertainty. The 25% price on Venezuelan oil buyers, if adopted, could trigger a chain reaction from economic consequences. Oil prices could increase, increasing inflationary pressures. World trade tensions could degenerate, harming American exports. Consumer spending could decrease, further slowing economic growth. The markets could remain volatile, investors reacting to unpredictable policy changes.
With Trump’s trade war showing no signs of de -escalation, the risk of an American recession is becoming clear. If economic data continues to weaken and the administration proceeds to its latest tariff threats, the US economy could go to a slowdown much earlier than expected.
