Recession risk rises: Global investment banks downgrade US economic outlook amid Trump tariffs
The world's largest investment banks and think tanks have sharply increased their estimates of the likelihood of a recession in the United States due to actions taken by the administration of Donald Trump.
Following the announcement on April 2 by the U.S. president of new import tariffs, seven leading investment banks immediately downgraded their forecasts for the U.S. economy, Reuters reports.
For example, Goldman Sachs raised its estimate of a U.S. recession last week from 20% to 35%, and this week — to 45%.
JP Morgan increased its estimate from 40% to 60%, citing concerns that the tariffs would not only accelerate inflation in the United States but also provoke retaliatory measures from other countries — a response that China has already announced.
U.S. analytics firm S&P Global, which includes the credit rating agency Standard & Poor’s, raised its recession probability estimate from 25% to 30–35%. The British bank HSBC estimates the likelihood of a U.S. recession due to tariffs at 40%.
The risk of an economic downturn in the U.S. has also been flagged by Bank of America, the Royal Bank of Canada, Britain’s Barclays, Germany’s Deutsche Bank, and Switzerland’s UBS.
World markets fall due to US tariffs
As reported, on 2 April, Trump announced the introduction of additional duties on imports of goods from 185 countries. The base rate was 10%, but for many countries it was higher. Tariffs on goods from China amounted to 34%, from the EU - 20%, from Switzerland - 31%, from Israel - 17%, from Kazakhstan - 27%. At the same time, no duties were imposed on Russia, the DPRK, Cuba, and Belarus. The Trump administration explained that these countries are subject to sanctions, so trade with them is already limited.
In addition, Trump imposed an additional 25% duty on imports of cars and spare parts.
This led to a serious downturn in global financial and commodity markets. In New York, the Dow Jones index reached its lowest level since mid-2024 on 4 April.
On the morning of 7 April,Japan's Nikkei index, which includes 225 companies, fell by more than 8%. Significant losses in morning trading were recorded on stock exchanges in China, Hong Kong and Australia. The German DAX stock index fell by almost 10% in early trading on 7 April.
