Can Trump’s tariffs push the world into a recession? | Money News Could Trump’s trade policies lead to a global recession? | Money News «People are uncertain about President Trump’s intentions with regards to global trade,» Sky News Business Live presenter Darren McCaffrey said on the Sky News Daily podcast. The uncertainty surrounding whether Trump’s tariffs are a permanent fixture or a negotiating tactic is causing concern among investors. Stockbroker Russ Mould suggested that markets are hopeful the tariffs are being used to negotiate better trade deals, which would benefit global trade in the long run. If the US and the rest of the world enter a recession, it could have significant economic repercussions. McCaffrey pointed out that even if the UK manages to avoid a recession, global economic downturn would still impact everyone, leading to a decrease in wealth. Despite the potential negative effects, there is some optimism. McCaffrey noted that countries with high tariffs, such as China, Vietnam, and Cambodia, may seek out new markets to offset the impact of US tariffs. This could potentially benefit countries like the UK in the short to medium term. Overall, the uncertainty surrounding Trump’s trade policies could have damaging effects on the US economy, pushing other countries to seek more stable trade partners. This shifting landscape could lead to new trade opportunities for countries like the UK and the EU. Could Trump’s trade war lead to global recession?

Donald Trump’s «Liberation Day» tariffs last week spooked the markets. 

Stock markets tumbled on Monday, with most US markets down and stocks in Hong Kong falling 13.2%, their worst day since 1997 during the Asian financial crisis.

There was slight growth in Asian and UK markets on Tuesday, but that was before top-rate tariffs came into effect on 60 countries, including a massive 104% levy on China, on Wednesday.

Tariffs latest: Follow live updates

US economists at Goldman Sachs raised their assessment of the odds that America will tip into recession to 45%, up from 35% the week before.

And if most tariffs aren’t reduced or negotiated away, «we expect to change our forecast to a recession», Goldman’s chief economist Jan Hatzius said in an analyst note.

Other economists are raising similar alarms, with JPMorgan putting the odds of a US and global recession at 60% and projecting inflation will reach 4.4% by the end of this year, up from 2.8% currently.

How do you know if a recession has begun?

The most commonly used definition of a recession is at least two consecutive quarters of economic contraction – or «negative growth» – in gross domestic product (GDP).

To break that down, GDP is the total value of goods and services produced over a specific time period. When it goes up, the economy is considered to be doing well.

When it goes down – negative growth or economic contraction – it’s not doing well. And when it doesn’t do well for six months, it counts as a recession.

In the US, the National Bureau of Economic Research is the body which officially declares a recession – taking in a variety of economic data, not just GDP, defining it as «a significant decline in economic activity that is spread across the economy and lasts more than a few months».

Currently, there are no signs the US or global economy is in recession, and it remains unknown if tariffs will have a large enough impact to knock America’s into reverse.

But it is this uncertainty that has the potential to cause the most damage.