JPMorgan warns of potential US recession amid trade policy concerns

JPMorgan has raised concerns about the potential for a US recession in 2025, citing the impact of President Donald Trump’s trade policies.

The investment bank’s chief global economist, Bruce Kasman, stated in Singapore on Wednesday that there is a 40% likelihood of a recession this year. He warned that if the administration’s proposed reciprocal tariffs on key trading partners take effect in April, the risks could climb even higher, potentially deterring foreign investment.

“Where we stand now is with a heightened concern about the US economy,” Kasman said, though he noted that his official forecasts have yet to be adjusted.

At the start of the year, Kasman had estimated a 30% chance of a recession, but recent developments have increased that probability to 40%. If the full range of tariffs is implemented, the risk could surpass 50%, he added.

JPMorgan’s current projection for US economic growth in 2025 stands at 2%, but the firm has not yet revised its outlook. Other major financial institutions, including Goldman Sachs and Morgan Stanley, have lowered their forecasts to 1.7% and 1.5%, respectively.

Uncertainty surrounding Trump’s trade policies has unsettled financial markets, as investors struggle to determine whether the measures are permanent or part of a broader negotiation strategy.

In February, Trump announced a series of tariffs on key trading partners, arguing that they are necessary to protect American interests. Last week, he raised tariffs on imports from Mexico and Canada to 25% and doubled duties on Chinese goods to 20%, with some increases postponed until April 2.

The president has also proposed a global reciprocal tariff system, stating that beginning April 2, every country will face the same duties it imposes on US exports.

A 25% tariff on steel and aluminum imports took effect on Wednesday, prompting Canada and the European Union to respond with countermeasures.

In an interview with Fox News on Sunday, when asked whether the US economy was heading toward a downturn, Trump dismissed recession concerns, calling it a “transition period” and asserting, “We’re bringing wealth back to America.”