Vice President JD Vance on Thursday did not rule out the possibility of a recession, which several economists have suggested may occur, as a result of President Donald Trump’s economic agenda, which includes fluctuating tariffs that have contributed to stock market volatility.
Newsweek has reached out to several economists for comment via email on Friday.
Why It Matters
Over the past few weeks, Americans have been in limbo as a series of 25 percent tariffs against Canada and Mexico have been imposed, paused, reimposed and paused again, which has led to retaliatory tariffs. Trump has also levied a 20 percent tariffs on Chinese goods.
The threat, imposition and subsequent pauses of tariffs have caused significant market volatility. A prediction model from global financial services firm JPMorgan Chase shows the likelihood of an economic downturn has risen significantly.
Reacting with trepidation to a potential trade war, the U.S. stock market had its worst day in 2025 on Monday, with the S&P 500 falling 2.7 percent, the Dow Jones Industrial Average dropping 2.08 percent, and the tech-focused Nasdaq dropping 4 percent, its worst day since September 2022.
Earlier this week, Trump was asked about the “rising worries about a slowdown,” which he did not deny, calling it a “period of transition” with some market “disruption.”
What To Know
In a Thursday interview on Fox News’ The Ingraham Angle, host Laura Ingraham asked the vice president about ongoing concerns from business leaders regarding a potential recession and economic downturn.
“What can you do to reassure them that this is all going to settle out?” she asked.
Vance replied that the president has been “quite clear” about his goals of expanding domestic investment and manufacturing, which underpin aspects of his tariff policy. “Rome wasn’t built in a day. Of course, this is not going to happen overnight,” he noted.
Ingraham followed up, asking if he could “rule out the possibility, as [former President Ronald] Reagan faced in his first term in office…can you rule out a recession, even a temporary one?”
Vance did not provide a definitive answer, saying, “Well, look, you can never predict the future.” He added that he believes “the economy, the fundamentals of the economy, are actually quite strong right now, and we’ll see how this unfolds.”
The vice president added that “inducing more businesses to invest in American workers, by reshoring some of those critical supply chains, we are going to make this economy stronger over the long haul and that is the president’s ultimate goal.”
Earlier in March, a prediction model from JPMorgan Chase, analyzed by Bloomberg, showed that the probability of an economic downturn has grown to 31 percent from 17 percent at the end of November. A Goldman Sachs Group Inc. model suggested increase recession risk, at 23 percent up from 14 percent in January.
The most recent U.S. recession was in 2020 at the beginning of the COVID-19 pandemic.
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AP Photo/Jose Juarez
What People Are Saying
Mark Williams, master finance lecturer at Boston University, previously told Newsweek via email when asked if a full-scale recession is on the horizon: “Trump’s reckless economic policies of inflationary tariffs could rapidly tip the U.S. economy into recession. Higher prices for raw and finished produces have reduced demand and pushed estimated GDP growth into negative territory. Recently the Atlanta Fed slashed its 2025 Q1 GDP forecast from growth to contraction. Based on the rate of economic deterioration, if Trump fails to soften his policy stance, the US could experience a full recession by June 2025.”
President Donald Trump said during a recent interview with Fox Business’ Maria Bartiromo: “I hate to predict things like that. There is a period of transition, because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing. And there are always periods of it takes a little time. I think it should be great for us.”
U.S. Commerce Secretary Harry Lutnick during an appearance on NBC News’ Meet the Press said: “There’s going to be no recession in America.”
He later said: “We’re going to see, over the next two years, the greatest set of growth coming from America as Americans. You saw at 1.3 trillion of new investments coming in America that, think of all those jobs, and remember, each trillion of investment in America is 1 percent of growth, GDP, so Donald Trump is bringing growth to America. I would never bet on recession. No chance.”
David Axelrod, Democratic strategist, wrote in an X, formerly Twitter, post on Friday: “Market has recovered a bit today but is still sharply down since 1/20. Consumer confidence has fallen to summer of ’22 levels. @POTUS and @VP are openly talking recession.”
What Happens Next?
Trump has issued a pause on Canadian and Mexican goods that meet the United States–Mexico–Canada Agreement (USMCA) criteria from a 25 percent tariffs until April 2.
Other tariffs are set to go into effect in April, which may lead to further market instability. Trump has continued to threaten to impose other tariffs, including a 200 percent tariff on all European Union alcohol products.
