Tariffs causing US economic downturn, increasing recession risk, uncertainty and inflation

From Morningstar: 2025-04-03 07:42:00

US real GDP growth forecast for 2025 and 2026 likely to be reduced, impacting inflation. Recession risk in the US has increased due to tariff hikes. Tariffs announced exceed previous forecasts, with little expectation of quick alleviation. President Trump’s mercantilist rhetoric signals long-term tariffs to reduce trade deficit and boost manufacturing.

Recent tariffs could increase average US tariff rate by 25%, highest in over 100 years. Impact on inflation, GDP, and taxes dependent on various factors. Uncertainty from tariffs may lead to decreased spending, potentially causing recession. Use of tariff revenue for tax cuts could impact demand side of economy. Monetary policy may need adjustment depending on inflationary impact of tariffs.



Read more at Morningstar: Tariffs Are a Self-Inflicted Economic Catastrophe…