Recession odds are increasing as Trump pushes his trade war further, top financial firm says

There’s an increasing risk of a recession beginning in the next 12 months as Donald Trump pursues a sweeping campaign of tariffs against U.S. trading partners, according to research from Goldman Sachs.

The firm raised its recession estimate to 35 percent, up from a previous 20 percent prediction, per a research note on Sunday.

The finding is based on “the sharp recent deterioration in household and business confidence, and statements from White House officials indicating greater willingness to tolerate near-term economic weakness in pursuit of their policies,” the Wall Street stalwart wrote.

The prediction comes as a series of sweeping tariffs, including a 25 percent levy on foreign-made cars, are set to take effect on Wednesday, on what the White House has dubbed “Liberation Day.”

The president is reportedly pushing his team for still more tariffs, including a 20 percent hike on all U.S. trading partners.

The Republican, who ran in part on a message of lowering consumer prices, has appeared nonchalant about the prospect that the tariffs could raise consumer prices, as most economists predict they will.

“I couldn’t care less. I hope they raise their prices because if they do, people are gonna buy American-made cars,” Trump said over the weekend.

On Monday alone, major stock markets saw both major dips and rebounds, though the big three U.S. indices are all down multiple percent overall this month.

A University of Michigan index tracking consumer sentiment also showed nervousness, with the measure down nearly 30 percent year-over-year as of this month, according to data released last week.

“This month’s decline reflects a clear consensus across all demographic and political affiliations; Republicans joined independents and Democrats in expressing worsening expectations since February for their personal finances, business conditions, unemployment, and inflation,” it added in a research note.

Part of the uncertainty may stem from the White House’s stop-and-go style on tariffs since taking office.

Trump has imposed 25 percent tariffs on aluminum and steel, 10 percent tariffs on China, and 25 percent tariffs on Canada and Mexico, though they’ve been delayed twice.