A growing number of economists expect the U.S. economy to hit a recession next year as the global economy slows and President Trump’s trade war with China continues.
In a National Association for Business Economics (NABE) survey released Monday, 38 percent of the more than 200 economists who responded said they believed a recession would hit next year. 34 percent predicted a recession would occur in 2021. Just 2 percent said they thought a recession would occur before the end of this year.
President Trump, who has emphasized the economy as he steps up his 2020 reelection campaign, said he is “prepared for everything” but downplayed the possibility of a recession.
“I don’t see a recession,” Trump told reporters on Sunday. “I don’t think we’re having a recession. We’re doing tremendously well. Our consumers are rich. I gave a tremendous tax cut. And they’re loaded up with money.”
The economists surveyed by the NABE predicted that the administration’s heavy tariffs on China would have damaging ripple effects on the U.S. economy. That, as well as the increasing budget deficits, contributed to their bleak outlook.
In May, the White House raised tariffs on $200 billion worth of Chinese imports from 10 percent to 25 percent, claiming Beijing had reneged on the previously agreed terms of a trade deal. The U.S. also currently has a 25 percent tariff on $50 billion worth of Chinese high-tech products. China has hit back with tariffs of up to 25 percent on $60 billion worth of U.S. products.
In hopes of restarting trade negotiations, Trump opted last week to delay additional tariffs on 60 percent of the remaining $300 billion in Chinese exports.
Meanwhile, 2019’s federal budget deficit has already exceeded 2018’s with two months to go until the fiscal year ends.