The tariffs announced by President Trump as the “economic independence declaration” are expected to usher in a new era in global trade, raising concerns about increasing inflationary pressures in the US economy and slowing down economic growth. So, what is a recession? What happens in a recession? A recession refers to a contraction in an economy’s economic activities. Technically, a recession is defined as two consecutive quarters of economic contraction in Gross Domestic Product (GDP). A situation where economic contraction persists and other economic activities lose vitality for a long period is considered a depression. Recessions can manifest in various ways. Global financial crises, political uncertainties, natural disasters, economic activity weaknesses are situations that pave the way for a recession. In addition, central bank decisions and a country’s monetary policies can trigger a recession. Tightening methods such as prolonging tight monetary policies or reducing the money supply excessively can lead to negative economic growth over time. As economic activity slows down during a recession, the increase in unemployment rate due to the contraction, consumers cutting back on spending, a decrease in demand, reduced imports, exports, and trade volume, lack of investment, and a decrease in production may follow. A recession signifies a temporary contraction in economic activities. Prolonged effective recessions can exacerbate economic difficulties and lead to social problems. Governments and central banks take policy measures to heat up the economy, stimulate it, and support recovery from a recession. Among these measures are lowering interest rates, providing fiscal incentives, and increasing public spending.