JPMorgan: Trump's Tariffs Bring $400 Billion in Tax Revenue, Along With Recession Threat
Michael Feroli, Chief Economist at JPMorgan, stated in a report that Trump's tariffs would generate substantial revenue but at the cost of price increases, which could impact consumers' purchasing power. He wrote, "On a static basis, the tariffs announced today would increase revenue by nearly $400 billion, accounting for about 1.3% of GDP. We estimate that the measures announced today could raise personal consumption expenditure prices by 1-1.5% this year, and we believe the inflationary impact will materialize by mid-year. The resulting hit to purchasing power could lead to negative growth in real disposable personal income from Q2 to Q3, which in turn could cause real consumer spending to contract in those quarters. This effect alone could push the economy into the danger zone of recession.
