Over the past few months, President Trump has made significant policy changes concerning Americans. The Trump administration has raised the prices of tariffs, most significantly with China. Most economists say Trump’s ambitious bid to change global trade will most likely backfire, as it is very possible for inflation to increase and a long-term drop in stock market could even lead to a recession.
The economic decline at the beginning of the year was a result of a wider trade deficit caused by Americans’ front-running purchases and cutbacks in government spending. In addition, imports skyrocketed from -1.9% at the end of last year to 41.3% in the first three months of 2025. Furthermore, exports have a registered rate of 1.8%. When imports surpass exports, that subtracts from the gross domestic product (GDP), dragging down growth within the first quarter. Trump’s top adviser, Peter Navarro, called the troubling report “the best negative print I have ever seen in my life.”
Reported to JP Morgan, the probability of there being a recession is at 60% as of last month. Additionally, the unemployment rate has continued to climb from 4.1% last month to 4.2%. As of now, the economy appears to be headed for a recession, with Trump continually escalating tariffs causing the economy to contract. Keep in mind that all the factors mentioned haven’t been this low since before the Great Depression. Although the recession may not emerge until 2026 or 2027, according to the ACLU, the economy should be under a recession watch going forward.
Given the evidence, it seems plausible to assume Trump and his administration were responsible, but Trump has pinned the blame on former president Biden.“I think the good parts are the ‘Trump economy’ and the bad parts are the ‘Biden economy’ because he’s done a terrible job,” Trump said in the interview that aired Sunday. Trump is confident in the economy and his new economic policies. However, American citizens are indifferent to the new directives. 66% of Americans say they are pessimistic, and the remaining 44% are nervous about the economy. Even though we cannot be fully certain if the economy will go into a recession, as of now, the economy seems to be headed in a grim direction.
Sources
https://www.anderson.ucla.edu/about/centers/ucla-anderson-forecast/recession-watch-2025#:~:text=As%202025%20begins%20to%20unfold,4.1%25%20and%20220%2C000%2C%20respectively.
https://www.cnn.com/2025/04/30/economy/us-gdp-q1
https://www.cnn.com/2025/05/04/business/trump-economy-tariffs-powell
https://www.npr.org/2025/04/07/nx-s1-5354927/recession-trump-tariffs
https://www.nbcnews.com/data-graphics/recession-warning-signs-trump-economy-what-know-charts-rcna196221