Tariff Effect: Will US face recession this year? JPMorgan has the answer to this question. Read on to find out

JPMorgan has raised its estimate of a US recession occurring before the end of the year. The bank now sees a 60% probability, up from its previous 40% estimate. The increase follows President Donald Trump’s announcement of new tariffs. These tariffs impact global markets and business conditions.

Increased Recession Risk

JPMorgan, the largest US bank, issued a new report on economic risks. Chief Economist Bruce Kasman stated that US policies remain a significant global concern. The latest trade policies have added to fears of an economic downturn. If these policies continue, they could lead to a recession in the US and possibly the world. The bank updated its probability model, increasing the chance of a recession to 60%.

Impact of Tariffs on Trade

A recession happens when economic growth declines for two consecutive quarters. Trump announced a 10% tariff on most US imports. Higher tariffs apply to specific countries. Vietnam faces a 46% tariff, China faces 34% in addition to an existing 20%, the European Union faces 20%, and Japan faces 24%. The administration says these tariffs target unfair trade practices.

Effect on Businesses and Consumers

Kasman’s report describes these tariffs as a tax increase. It states that they raise the overall US tax rate on imported goods by approximately 22 percentage points, reaching an estimated 24%. Higher costs for businesses and consumers could slow spending and investment, leading to economic contraction.

Wall Street Concerns

Many analysts worry that rising tariffs will harm economic growth. They fear inflation could increase while unemployment rises. Some investors expect financial markets to react negatively to these policies. Other research firms, including Barclays, BofA