United States President Donald Trump has declined to rule out the possibility of recession amid market concerns over his “America First” economic agenda. During an interview with Fox News aired on March 9, 2025, Trump expressed uncertainty when asked about the likelihood of recession this year. “I hate to predict things like that. There is a period of transition because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing,” said Trump. He elaborated, “It takes a little time, but I think it should be great for us.”
Trump's comments come at a time of heightened market jitters, triggered by his recent announcements on tariffs, as well as signs of economic slowdown. Less than 48 hours after imposing new tariffs—25 percent on imports from Mexico and Canada and doubling tariffs on Chinese goods to 20 percent—Trump announced he would postpone some duties on Mexican and Canadian goods until April 2. This backtracking raised eyebrows among investors and economists alike.
The S&P500 index experienced significant turbulence, dropping more than 3 percent from March 3 to March 7, recording its worst weekly performance since September 2024. Compounding this market turbulence, the Atlanta Federal Reserve revised its GDP estimate for the January-March period, downgrading it from 2.3 percent growth to a 2.4 percent contraction. Meanwhile, Goldman Sachs raised the odds of recession in the next 12 months from 15 percent to 20 percent.
On the other hand, the US Bureau of Labor Statistics reported the addition of 151,000 jobs for January, which, though slightly below expectations, mirrored the overall average for 2024, providing at least some optimism for the economy.
Commerce Secretary Howard Lutnick took to NBC's Meet the Press to counteract recession worries, insisting, “Donald Trump is a winner. He’s going to win for the American people. That’s just the way it’s going to be.” Lutnick added emphatically, “There’s going to be no recession in America,” claiming he would “never bet on recession” with “no chance” of such occurring.
Despite the reassuring statements from Lutnick, uncertainties linger. The “transition phase” Trump referred to could imply economic adjustments influencing inflation and economic growth patterns. Experts like Rachel Winter, investment manager at Killik & Co, speculate the tariffs implemented could result in inflationary pressures, as “the level of tariffs… will have to cause inflation somewhere down the line.”
Looking at the broader economic tableau, analysts are closely watching the tit-for-tat tariff exchanges between the US and its trading partners. On March 3, new Chinese tariffs targeting select US farm products began, signaling escalation. Such retaliatory measures mean added pressure on American farmers, with tariffs ranging from 10 to 15 percent on exports such as chicken, beef, pork, wheat, and soybeans.
Former Commerce Department official Frank Lavin shared insights on the trade situation, commenting on the need for careful management to avert escalation. He reminded listeners through the BBC, “Tariffs will eventually fade a bit but still be an extra burden on the US economy.”
Pressure on markets leads to speculative behaviors among investors, fostering volatility. Fears lingered about price rises stemming from Trump's tariffs, which some analysts believe could detract from overall economic growth, affecting the wealth distribution Trump aims to achieve.
Despite internal and external pressures, Trump maintains his optimistic outlook for the economy. His administration’s aggressive tariff strategy is rooted in broader economic goals, handed down from his “America First” ideology, focusing on reducing trade deficits with foreign nations and revamping domestic manufacturing industries.
The political ramifications of these policies could be significant as they continue to evolve, and the impacts on US agriculture and consumer prices are likely points of contention. Stakeholders from different sectors are beginning to voice concerns about how sustained tariffs might affect various economic segments.
Overall, the economic narrative remains uncertain with market volatility signaling investor apprehensions. Trump's assertions of transition, wealth turnaround, and his administration’s stance could define the economic conversation for the foreseeable future, shaping policy directions and electoral sentiments within the US.
With the administration asserting confidence amid skepticism, the balancing act between trade ambitions and economic realities may define the political and economic landscapes as the year continues. Only time will tell if these policies will produce the intended outcomes or amplify the pressures already felt across the market.