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E-mail Xinhua, April 2, 2025
by Ahmed Sallam
About two months after the new U.S. administration took office, growing concerns emerged across economic sectors that U.S. President Donald Trump's tariff-centric trade policies could push the United States into a recession.
From January to March, assessments from international financial institutions, economic analysts and media outlets reflected widespread pessimism within the United States.
According to an IMF report in February 2025, the growth of the U.S. economy is expected to slow down to 1.5 percent by the end of the year, from 2.3 percent in 2024. The main reason for the drop is the impact of the tariff hikes.
On March 12, Bruce Kasman, a senior economist at J.P. Morgan, said that the unbalanced financial policies and trade restrictions may boost the risk of an economic recession in the United States this year, noting that investors had started to limit their trading in the U.S. markets over a state of uncertainty.
The U.S. Chamber of Commerce, in its report published in March, said that major U.S. companies limited their investment by 10 percent in the first quarter of 2025 due to the uncertainty over the trade policies and the increasing importation costs.
In an article published by The New York Times on Feb. 20, Paul Krugman, a winner of the Nobel Prize in Economic Sciences, said "Trump's current economic policies remind him of the period before the 2008 recession," adding that the negligence of scientific economic analysis in favor of political slogans could lead to unpleasant consequences.
Despite repeated bids by the White House to reassure markets, statements by some federal officials reflected clear concern.
In a congressional hearing on March 7, Federal Reserve Chairman Jerome Powell voiced concern about some current economic policies.
He warned that slowing consumer spending and rising borrowing costs could increase the possibility of an economic recession. Powell added that the Fed would not rush to cut interest rates because the economic situation remains uncertain.
Across the Atlantic, concerns are no less acute.
Euronews published a report on Feb. 20, arguing that the rising trade tensions between Washington and Brussels could return the world to the trade war scenario that happened in Trump's first term.
Britain also expressed concern about the impact of U.S. tariffs on its exports. British finance minister Rachel Reeves said protectionist policies will not benefit anyone in the long run.
The Financial Times said in a report on March 5 that the new tariff policies could lead to a 1.1 percent contraction in the global economy this year, increasing the risk of a global recession.
In light of recent developments, concerns are mounting that the U.S. economy may be teetering on the brink of another recession. While Trump maintains that his trade policies will prove beneficial in the long run, many economists warn they could instead backfire by heightening uncertainty in global markets.
The critical question now is whether Trump can avert a so-called "Trumpcession," or if the United States will face an economic crisis reminiscent of 2008. The answer may lie in the months ahead.
Editor's note: Ahmed Sallam is a former undersecretary of Egypt's State Information Service.
The views expressed in this article are those of the author and do not necessarily reflect the positions of Xinhua News Agency.
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