U.S. tariffs and falling oil prices spark recession fears
Oil prices in the USA have dropped below $60 per barrel, and experts warn that President Donald Trump's new tariffs could push the United States, and indeed the entire global economy, into a recession. These concerns have increased forecasts regarding oil demand, according to CNBC.
On Sunday, oil prices fell below $60 per barrel. This decline is linked to President Donald Trump's reversal in U.S. tariff policy. For several days, persistent voices have indicated that this could negatively impact the economy and potentially lead to a recession in the U.S. and globally.
West Texas Intermediate (WTI) crude oil futures dropped by over 3% to $59.78, marking the lowest level since April 2021. The reduction in oil prices results from a series of previous discounts of 6% last week, and the newly announced tariffs have sparked further concerns that higher costs for businesses could trigger an economic slowdown, explains CNBC.
According to JPMorgan, the new tariffs could push the United States and possibly the world into a recession by 2025. The bank now estimates the risk of a U.S. recession at 60%, up from a previous 40% estimate. According to Mohamed El-Erian, Allianz's chief economic advisor, the risk of a downturn in the United States has risen to 50%. He believes markets still underestimate the extent to which Trump's aggressive trade policies will influence inflation. Increasing production costs due to the new tariffs could dampen oil demand, potentially keeping raw material prices low.
Donald Trump imposes tariffs on the entire world
On 2nd April, Donald Trump announced drastic tariffs on nearly the world: 10% on all imports and 25% on foreign cars. He later revealed a list of countries and the specific tariff rates applicable. General tariffs came into effect on 5th April, with additional tariffs for particular countries taking effect on 9th April.
The tariffs imposed on the EU by the United States will reach 20%. This is less than the new tariffs Donald Trump plans to impose on China, which could be as high as 34%, but more than the retaliatory tariffs aimed, for example, at Brazil, which will be 10%.
During a press conference in front of the White House, the U.S. president argued that these would be "nice tariffs," not as high as those other countries impose on the USA. He stated that with such a tariff policy, America will become prosperous again.
