Economic growth of the United States could be hit by the ongoing US trade war being ensued by Donald Trump, say financial forecasters.
According to a survey of economists conducted by Bloomberg last month, a 2% economic growth is predicted in 2025, followed by a 1.9% growth in 2026. The survey was conducted between April 18 and 23 and included responses from 82 renowned economists.
This month’s survey suggests a growth forecast of 1.4% in 2025 and 1.5% in 2026. Nearly 45% of the forecasters see chances of an economic downturn in the next 12 months. In March, the prediction of an economic downturn was just 30%.
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US recession fears increasing
The imposition of a sharp 145% tariff on China, one of the biggest trading partners of the US, is one of the key reasons forecasters fear recession.
Brett Ryan, senior US economist at Deutsche Bank AG, was quoted by Bloomberg, saying: “Stronger growth outcomes require a swifter resolution of the ongoing trade war and a renewal of confidence in US policymaking.”
The US’ effective tariff rate is now the highest in more than a century, which is taking a toll on both American consumers as well as businesses. Even the IMF has now warned that there could be a ripple effect of the US tariffs across the world.
Meanwhile, inflation fears are also looming. Comerica Bank economists Bill Adams and Waran Bhahirethan told Bloomberg, “Inflation is seen rising but doesn’t get as bad as in 2022”. The respondents of the survey also see the unemployment rate climbing to 4.6% by the end of 2025. This is a significant jump from the 4.3% rate that was predicted in March.
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