JPMorgan Raises 2025 Recession Risk to 60% Over Tariffs

JPMorgan Chase has raised the probability of a US and global recession to 60% in 2025, citing a significant escalation in tariffs announced by US President Donald Trump. This marks a 20-percentage-point increase from the bank’s March forecast. JPMorgan also warned that current trade policies represent the greatest threat to the global economic outlook.

According to a report reviewed by MarketWatch, the cumulative tariff increases this year—totaling 22%—would constitute the largest US tax hike since 1968. “The effect of this tax increase will likely be amplified by retaliatory measures, a decline in US business confidence, and supply chain disruptions,” said Bruce Kasman, Chief Economist, JPMorgan.

Kasman described the current US trade stance as a “significant macroeconomic shock,” adding that while JPMorgan has not yet fully factored in the impact of these tariffs into its forecasts, it is “likely” they will trigger a global recession by 2025. For the United States, the downturn may be “mild,” but prolonged trade restrictions and reduced migration flows could raise supply-side costs and curb long-term GDP growth.

The analysis was published in a JPMorgan report titled “There Will Be Blood,” which emphasizes that US protectionism is the top global economic risk of 2025. “The probability of achieving balanced growth and normalized inflation has now fallen to just 10%,” the report states.

Trump’s latest trade measures include a minimum global tariff of 10%, effective this Saturday, and a “reciprocal” tariff scheduled for Apr. 9. These measures apply differentiated rates by region: 20% on European imports, 34% on Chinese goods, and 26% on products from India.

In response, China’s Ministry of Commerce announced a 34% tariff on all US imports, effective Apr. 10, one day after the US tariffs take effect. China also unveiled new export restrictions on several critical rare materials used in electronics, aerospace, and other high-tech industries.

While monetary and fiscal policy tools may help cushion the impact, JPMorgan noted their effects would be limited. “Even if there is policy easing, the overall macroeconomic damage will remain significant,” Kasman said.