Josh Weiner
The possibility of a global recession has sharply escalated, with JPMorgan’s Chief Economist Bruce Kasman warning that newly announced U.S. tariffs could deliver a serious economic blow if sustained throughout 2025. In a note to clients titled “There Will Be Blood,” Kasman cautioned that the risk of a global economic downturn this year has climbed to 60%, up from a previous estimate of 40%.
“These tariffs represent the largest tax increase on American households and businesses since 1968,” Kasman wrote. “Their impact is likely to be amplified by retaliatory measures, deteriorating business sentiment, and intensified supply chain disruptions.”
The warning came after President Donald Trump unveiled a broad set of tariffs targeting imports from multiple key trade partners. The announcement rattled global markets, with the S&P 500 logging its steepest single-day drop since the pandemic-era crashes of 2020.
Recession Now a Base Case for Wall Street
JPMorgan wasn’t alone in its concern. Multiple Wall Street firms issued fresh warnings Thursday, with some now considering a U.S. recession not just a risk but their base-case scenario for 2025. The combination of policy uncertainty and rising trade barriers has cast a dark cloud over the economic outlook.
While JPMorgan is not yet altering its core projections, Kasman signaled that further revisions may be imminent depending on how events unfold.
“We’re taking a cautious, observational stance for now,” he said. “But if the full scope of the tariff measures is carried out, it would represent a major macroeconomic shock—one that’s not yet reflected in most forecasts.”
Trump Leaves Room for Negotiation
Despite the aggressive tone of the tariffs, President Trump signaled some willingness to ease up under the right circumstances. Speaking aboard Air Force One, he told reporters he’d consider lowering the trade barriers if foreign counterparts “bring something phenomenal” to the table.
However, until a breakthrough emerges, economists are bracing for turbulence.
“These trade policies carry long-term consequences,” Kasman warned. “If sustained, they could trigger a recession not just in the U.S., but across the global economy.”
The Bottom Line
With the threat of retaliation from trade partners, potential inflationary pressures, and reduced consumer purchasing power, JPMorgan sees serious downside risks looming. If negotiations falter and tariffs remain intact, the world could be headed toward a synchronized economic contraction not seen since the Great Recession.
