JPMorgan’s chief economist at JPMorgan has a dark look at President Donald Trump’s aggressive policy: “There will be blood.”
In a research note for customers published on Thursday, Bruce Kemman warned of JPMorgan, along with many other economists of companies, that the risk of a global economy in the recession has increased from 40 % to 60 % in response to the declaration of “Tahrir Day” tariffs on Wednesday.
Trump announced on Wednesday that 10 % sweeping goods from any country imported to the United States, to the high definitions of 60 commercial partners with a continuous trade deficit with the United States.
The definitions “Tahrir Day” widely affect countries including China and Japan, as well P. Pencil. they In addition to the current definitions against the best commercial partners in the United States, Canada and Mexico.
“The annoying American policies have been recognized as the greatest danger to global expectations throughout the year,” says JPMorgan’s research note. “The latest news enhances our concerns because American commercial policy has become decisively less friendly than we expected.”
The giant banking experts describe the customs tariff “at the primary level” as a functional tax increase in the US family and commercial purchases of imported goods. Economists and former Business Insider experts have told the increasing import costs caused by a Trump tariff plan that is expected to lead to the high prices of everything from stored foodstuffs such as coffee and sugar to clothes and larger purchases such as cars and devices.
JPMorgan analysts found that this week’s announcement, following the increases in the previous customs tariffs, raises the average tax rate in the United States “by approximately 22 % to an estimated 24 %,” equivalent to 2.4 % of the total value of all goods and services produced within the country, or gross domestic product.
“This volume will be equal with the largest tax height since World War II,” says the JPMorgan Research Memorandum. Its effects can be amplified “through revenge, a slide in the American commercial morale, and the supply chain is disabled.”
“Therefore, we confirm that these policies, if they are continuing, are likely to push the United States and possibly the global economy to recession this year. Updating our probability scenario makes this point, which raises the risk of recession this year to 60 %,” the observation continues.
But the recession at the country or global level “is not an excessive conclusion”, economists of JPMorgan as a potential silver lining.
“Besides the clear point that policy procedures can change in the coming weeks, we continue to confirm that American and global expansions stand on solid ground and should be able to withstand a modest shock.”
Currently, the observation indicates that the economists of JPMorgan “are looking at the full implementation of the declared policies as a great economic shock” – one that has not been easily recovered, if Trump’s policies continue.
