The escalating trade war between the United States and nearly every major trading partner has sparked a series of forecasts and fears that a global recession may approach.
Economists who talked to CBC News say that one is actually inevitable, Unless we will soon see the big pivot from the United States.
Mark Zandi, chief economist at Moody’s Analytics Power and Politics on Monday.
“It’s a very dark scene for the United States and the expansion, Canada and the rest of the world.”
Brokerage JP Morgan has lowered the chances of a global recession by 60%, up from 40% at the end of March after U.S. President Donald Trump announced global tariffs last week.
With the global tariffs on President Donald Trump, Moody’s chief economist Mark Zandi told Power & Politics that a global recession could hit in June or July, and that if the U.S. cannot cancel its escalation as soon as possible, it will “not return.”
“We have never seen this type of tariff trade war,” said Moshe Lander, senior lecturer in economics at Concordia University.
He said those tariffs backfire when Washington’s trading partners retaliated.
“We talk into one”
Traditionally, an economic recession has been defined as two consecutive losses in a country’s GDP. Tu Nguyen, an economist at RSM in Canada, said that in a global recession, these losses will occur in multiple economies around the world.
She said there is no “fixed” definition for major economies, including China and the EU, in U.S. tariffs, among all major economies facing trade uncertainty, but the writing on the wall is obvious.
“If the U.S. does not change its policy stance on tariffs … we hope to define the recession in the next six months,” Nguyen said.
“I think it’s possible to say we’re talking about a person.”
Zandi predicts that if Trump “can’t find the off-road vehicle”, the U.S. will start the recession in June or July.
He said the conflict between the United States and China is “the two largest economies on the planet” and that is one of the biggest obstacles.
Investors around the world are raising alarms after the third day of market chaos related to tariffs, with one of the billionaire Trump allies even warning that not backing down on tariffs could release a “self-caused nuclear winter.”
After China meets Trump’s tariffs, he imposed more levies – meaning that imports from China will be a stunning 104% when these latest tariffs begin on Wednesday.
“If the two countries continue to raise their tariffs on TAT, then we will end up having little trade between the two countries and the consequences will be very difficult,” Zandi said.
Global and national recession
In all countries, global recessions are not equal. For example, Canada went through a period of economic activity during the 2008 global financial crisis, but “everything was good, everything was OK.”
However, Canada’s position in this frustration doesn’t look good.
Andrew DiCapua, chief economist at the Canadian Chamber of Commerce,,,,, “The reality is that if the United States falls into recession, Canada and Mexico will inevitably feel the worst of the impact because our economy is integrated.”
Watch | Tariffs may trigger “Economic Nuclear Winter”:
Although workloads fell by 33,000 jobs in March amid tariff concerns, how global tariffs will affect Canada’s GDP or job markets, reversed growth late last year.
But economists predict that as global tariffs make goods less accessible and expensive, consumers will retreat from purchases and investments, weakening demand and increasing the likelihood of layoffs.
“The layoffs have begun, especially in departments that are closely linked to U.S. supply chains such as Autos, and we are starting to see reflections in the labor market data,” DiCapua said.
Reducing hiring and more businesses will follow in the recession, making it harder to get a raise or change jobs. At the same time, life will become more expensive.
“A typical American family will have to spend $2,100 [US] Zandi said that in the past year, the same item as today.
There is still a way to avoid a global recession, but it will depend on the United States greatly reducing or completely eliminating its tariffs.
“Off-road cross-border to avoid this must come from the United States,” Nguyen said, adding that speed is crucial.
“The longer this happens, the more time it takes for layoffs to happen, and more and more factories will be closed because they cannot operate under the new tariff rules.”
The Trump administration has arranged talks with South Korea and Japan, with Italian Prime Minister Giorgia Meloni visiting next week. But at present, tariffs in all specific countries are moving forward.
“It’s important to remember that it’s entirely caused by the American self,” Nguyen said. “For example, like the 19-year-old pandemic, it’s not something we’re blinded. But it’s having an impact on the whole world.”
