J P Morgan projected that the United States may slip into a crisis by the end of 2025, attributing the drop mainly to President Donald Trump’s previously announced mutual taxes. The estimates comes days after Trump imposed sweeping duties on goods in a pay to balance business relations, with more excursions targeted at nations with big trade deficits with the US, including India.
In a statement released Friday, Michael Feroli, key US scholar at J P Morgan, wrote that America’s gross domestic product is likely to stretch” under the mass of the taxes”. He further warned that the resulting economic downturn is expected to “push the unemployment rate up to 5.3]percent ]”, according to The Hill.
The fears were echoed by US Federal Reserve Chair Jerome Powell, who said the tariffs may offer a heavier punch to the business than originally estimated. Speaking at a business news conference on Friday, Powell said,” While doubt remains raised, it is now becoming clear that the price increases will be considerably larger than expected. The exact is likely to be true of the financial results, which will include higher inflation and slower development”.
Under the fresh plan, a 10 % tax applies to all goods beginning April 5. From April 9, states with the largest US business deficits— India among them—will experience higher, customised charges. India may view a 26 % tax on all its imports.
Despite this strong climb, brokerage firm Jefferies said the impact on India’s outgoing business may become limited. In a consumer notice, the company pointed out that major American trade sectors —such as IT services, pharmaceuticals, and automobiles—are not directly hit by the price increase.
” The 27 per cent ( now corrected in a document to 26 per cent ) tariff on India is looking reasonable from a relative perspective. Bigger worries are on weaker US economic outlook, which is a -ve for IT services and other exporters”, Jefferies noted. While the firm played down direct tariff consequences, it cautioned that a broader US slowdown may weigh on demand for Indian exports, particularly in technology services.
The global economic outlook now faces further pressure as businesses brace for the cascading effects of the escalating US trade war.
