President Donald Trump’s slew of “Liberation Day” tariffs announced Wednesday has investors worrying his protectionist politics could plunge the United States, and the world, into a recession.
The stock market plunged on Thursday, experiencing its worst day since the COVID-19 pandemic began in 2020. The approximately $3.1 trillion loss in market value sparked panic from investors.
JP Morgan analysts put the chance of a global recession at 60% if the tariffs are sustained, up from 40% in 2024.
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“The effect of this tax hike is likely to be magnified—through retaliation, a slide in US business sentiment, and supply chain disruptions. The shock is likely to be only modestly dampened by the flexibility tariff hikes afford for further fiscal policy easing,” JP Morgan’s Chief Economist Bruce Kasman wrote.
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