Political and economic turmoil following President Donald Trump’s tariffs against tens of countries are sending experts and consumers alike into a frenzy amid concerns about a potential recession.
“It will be difficult for the U.S. to avoid a recession if the tariffs stay at the level that's been announced,” Claudia Sahm, chief economist at New Century Advisors, tells TIME. “You put the tariffs together with the downsizing of the federal government, the cutting of the grants that go to government adjacent sectors, and then shutting down immigration into the country. Those all are things that will weigh on [economic] growth.”
Economists have been critical of the administration’s approach to tariffs, which has been both applied and calculated in a brusque and confusing manner. While concerns regarding unfair trade competition at the cost of U.S. manufacturers and workers are significant, experts say the tariffs have brought forth concerns about stability in the U.S. market. “Exports to other countries and imports into the U.S. from other countries are going to decline because there's there's higher levels of uncertainty,” says John M. Veitch, dean of the School of Business and Management at Notre Dame de Namur University.
Conversations around the potential effects to the economy also impact consumer confidence—which measures how everyday people feel about the current and future state of the economy. The consumer confidence index fell by 7.2 points this March, decreasing for the fourth consecutive month. (The assessment was made before the exact rates of Trump’s “reciprocal tariffs” were announced, but is a good measure of general consumer attitudes in the U.S.)
The newly-announced tariffs will be imposed on April 9. They arrive on top of other taxes on steel, aluminum, and imported automobiles and car parts that were announced earlier this year.
Here’s what to know about a recession, and what to expect during one.
What is a recession? And what’s the difference between a recession and a depression?
The National Bureau of Economic Research (NBER) is the nonprofit, nonpartisan organization that determines whether the country is in a recession. It defines a recession as a “significant decline in economic activity that is spread across the economy and that lasts more than a few months.”
When that recession becomes particularly strong or lasts a particularly long period of time (or when the GDP declines by more than 10%), it can turn into a depression. Since the turn of the century, the U.S. has experienced multiple recessions, including the dot-com recession, the Great Recession from 2007 to 2009, and the economic downturn spurred by the COVID-19 pandemic. The last time the U.S. experienced a depression was the Great Depression of the 1930s, during which the U.S. economy fell by 30% over four years but lasted a decade.
Will a recession happen this year?
The U.S. economy is generally strong. The country has in part recovered from the pandemic with a historically low unemployment rate of about 4%, according to the U.S. Department of Labor, despite a hiring rate that remains relatively low.
But investors and politicians have been calling on Trump to pause his tariffs due to concerns about a looming recession. On Monday, JPMorgan Chase CEO Jamie Dimon warned his shareholders about the tariffs' impact on inflation and the increased likelihood of an economic downturn. Billionaire hedge fund manager Bill Ackman, who recently endorsed Trump during the 2024 election, warned the president in a Sunday post on X that tariffs could impact confidence in the U.S. as a trading partner.
Three economic experts that TIME spoke with, agree.
Sahm says that the tariffs’ intended impact—to increase U.S. manufacturing—is merely prospective, and will arrive at a cost. “It's going to take years to see this vision through,” she says. “Companies don't build manufacturing facilities in days.”
Trump acknowledged as much during Monday’s press conference with Israeli Prime Minister Benjamin Netanyahu. “You [have] got to build a thing called the factory. You have to build your energy. You have to do a lot of things," he said to the press. “We’re going to let them build their own power plants…We're going to compete with China and others."
The tariffs are also expansive in scope, elevating the cost of many goods. “It's very difficult to escape the tariff because it's going to be applied to so many countries—the magnitude of it is so high that businesses, to some extent, are going to be in a position that they have to pass it on to consumers, because these numbers are just big,” says Sahm. Inflation rates during the pandemic reached as high as 7% in 2021. They have since fallen, measuring about 3% for 2024 and now stand to be impacted further.
Experts say the automobile industry, which heavily relies on an international supply chain, stands to be the most-affected. Veitch adds that phones, computers, and other products that rely on foreign chips or semiconductors will also increase in price.
Sahm says that the effects of the tariffs will be felt rather immediately, and likely last for a year or two. Brown University economics professor Şebnem Kalemli-Özcan predicts that the recession will last for less than a year, while Veitch suspects the impact could be anywhere from six months to a year.
Changes in consumer attitudes may be more immediate. “People decide they're not going to take that vacation. People decide they can't afford a new house,” he says. “It's [these] really immediate decisions that may take a short period of time to show up.”
How will the job market be impacted by a potential recession?
Businesses will also be scaling back from investments and hiring amid the financial insecurity. Kalemli-Özcan says that those who are employed will have limited job opportunities, though others may feel the brunt of the tariffs’ economic impact.
“It'd be a bad time to graduate,” says Veitch. “I think that if we're not already, we're about to go into what I call a public goods recession.” Veitch references the administration's disruption to social services given by the federal government under the Department of Government Efficiency (DOGE), which has laid off more than 280,000 federal workers at agencies such as the Department of Education and the National Park Service. DOGE has also been behind cuts to funding for research grants for HIV, and other public health research that is tied to a sexual or racial minority.
A decrease in grants limits the opportunities current students have to participate in research, but also limits a school's ability to provide financial aid to prospective students.
“It seems like they're being dismantled at a time when one would think that the people who are most vulnerable to losing jobs, are losing their jobs,” says Veitch. “Other economic policies have generated an almost greater need for the social safety net.”
The tariffs have been hailed as an opportunity to generate domestic jobs, but experts say that even if they do increase employment, it will be more so for jobs that are highly automated. “The face of manufacturing in America has changed. It's not an assembly line with tons of people turning screws, says Veitch. “It's a highly automated, robotic assembly line that doesn't employ many people. So you're kind of targeting an area that, in fact, over the past 20 years, has experienced high productivity because they found a way to combine automation with fewer workers.”
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