J.P. Morgan has projected that the United States will slip into recession by the end of 2025, attributing the anticipated downturn to the fresh wave of tariffs introduced by President Donald Trump.
Michael Feroli, the firm’s chief US economist, forecasted that the American gross domestic product (GDP) is expected to contract “under the weight of the tariffs.” He added that this economic setback could push the unemployment rate up to 5.3 per cent.
The warning from one of the world’s leading financial institutions came merely two days after President Trump announced reciprocal tariffs aimed at several US trading partners. The administration stated the move was part of a broader effort to recalibrate trade relations.
Federal Reserve Chair Jerome Powell echoed concerns over the consequences of the tariff regime, suggesting that the economic damage may be greater than previously anticipated.
Also read: US revises down reciprocal tariff on India from 27 to 26 pc
“While uncertainty remains elevated, it is now becoming clear that the tariff increases will be significantly larger than expected. The same is likely to be true of the economic effects, which will include higher inflation and slower growth,” Powell said on Friday.
As per President Trump’s directive, a 10 per cent tariff will be levied on all imports from 5 April. Beginning 9 April, countries with the largest trade deficits with the US will face higher, tailored tariffs. India is among the affected nations, facing a 26 per cent tariff on all exports.
Despite the steep levy, global broking firm Jefferies struck a cautiously optimistic tone about India’s prospects. The firm noted that vital Indian export sectors—such as information technology (IT) services, pharmaceuticals, and automobiles—would remain largely unscathed.
In its assessment, Jefferies called the 26 per cent tariff “reasonable” in comparison to those imposed on other nations.
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