President Donald Trump’s escalating tariff policies have sparked concerns about their potential economic impact. Experts warn that the new tariffs, including a 25% levy on imported cars and auto parts, could significantly raise consumer prices and disrupt industries reliant on global supply chains. Goldman Sachs has increased its recession probability to 35%, citing risks such as inflation spikes and slowed GDP growth. Businesses may face higher operational costs, leading to reduced investment and layoffs, while consumers could experience sticker shock from rising prices.

The international response to Trump’s tariffs has been swift, with Canada, Mexico, and China announcing retaliatory measures. These include tariffs on U.S. agricultural products and other goods, which could hurt American exporters. Analysts predict a decline in GDP across affected economies, with the U.S. potentially losing $100 billion annually. The uncertainty surrounding future tariff expansions further exacerbates fears of economic instability, as trade conflicts intensify globally.

While Trump frames the tariffs as a strategy to boost domestic manufacturing and address trade imbalances, economists argue that the policies may backfire. Inflation concerns are mounting, with projections showing core inflation rising above the Federal Reserve’s target. Additionally, sectors like automotive and electronics are bracing for disruptions that could lead to reduced production and higher unemployment rates. The long-term effects of these tariffs remain uncertain but are widely expected to pose significant risks to economic growth.