Global Recession Risk Climbs to 60% If Tariffs Persist, Warns JPMorgan

NEW YORK: The global economy is teetering on the edge of a possible recession as a direct consequence of the Trump administration’s sweeping tariff policies, according to JPMorgan Chase. The bank now pegs the global recession risk at 60%, sharply up from 40%, should the tariffs remain in place throughout 2025.

JPMorgan Chief Economist Bruce Kasman issued the stark warning in a note to clients on Thursday, describing the tariffs as “the largest tax hike on US households and businesses since 1968.”

“The effect of this tax hike is likely to be magnified — through retaliation, a slide in US business sentiment, and supply chain disruptions,” Kasman wrote in the report titled, “There will be blood.”

The announcement from President Donald Trump outlining fresh levies on imports from multiple trading partners has already rattled global markets. The S&P 500 recorded its steepest single-day loss since 2020, with volatility spreading to bond and currency markets across Asia and Europe.

Kasman’s analysis was echoed by several Wall Street firms on Thursday, some of which have now made a US recession their base case scenario. While JPMorgan has not yet altered its official economic forecasts, the tone of its latest note signals heightened concern.

“We are not making immediate changes to our forecasts and want to see the initial implementation and negotiation process that takes hold,” Kasman clarified.
“However, we view the full implementation of announced policies as a substantial macroeconomic shock not currently incorporated in our forecasts.”

Trump: Open to Negotiation

Despite the escalating market anxiety, President Trump appeared unfazed, telling reporters aboard Air Force One that he remained open to rolling back tariffs if trade partners could offer “something phenomenal.”

Still, economists warn that the current uncertainty — compounded by fears of retaliatory measures — could stall business investment, restrict consumer spending, and shake global supply chains.

With the US Federal Reserve also watching developments closely, analysts say policymakers may be forced to weigh potential emergency responses if confidence in economic stability erodes further in the coming months.