JPMorgan’s research note titled “There will be blood” indicated that Trump’s new tariff decision has raised the risk of stagnation in the global economy by 20 points. The announcement made by US President Donald Trump on April 2, which marked the “Day of Salvation” with numerous new customs tariff rates for many countries, has resulted in the risk of recession in the US and global economy increasing from 40% to 60%. According to Business Insider, JPMorgan’s Bruce Kasman, along with a team of economists, warned in a research note sent to their clients regarding the tariff announcement made on Wednesday that there has been a 20-point increase in the risk of the economy entering a recession. While Trump imposed a 10% customs duty on imports from all countries, for some nations, this percentage reached up to 60%, impacting countries like China, Japan, and the European Union (EU).

“TRADE POLICY LESS FRIENDLY THAN EXPECTED”

In JPMorgan’s chief global economist Kashman’s note titled “There will be blood,” it was emphasized that the destructive policies of the US pose the biggest risk to the global economic outlook this year. The note stated that recent news shows that the US trade policy has become less friendly to business than originally anticipated. JPMorgan economists referred to the tariffs as a “fundamental” tax increase on imports of goods. Economists and supply chain experts who spoke to Business Insider before the new announcement warned of import cost increases leading to a wide range of price hikes from coffee and sugar to vehicles and electronic devices.

“US AND POSSIBLY GLOBAL ECONOMY AT RISK OF RECESSION”

JPMorgan analysts noted that, in addition to previous tariff increases, this week’s announcement has raised the average US tax rate from approximately 22% to an estimated 24%, equivalent to about 2.4% of the total value of goods produced in the US. According to JPMorgan’s research note, this increase is on par with the highest tax increase since World War II. Therefore, the note highlighted that if this trend continues, these policies could push the US and likely the global economy into a recession this year, increasing the risk of a recession to 60% by 2025.