NEW YORK (PIX11) – President Donald Trump’s tariffs on products from Canada and Mexico have some Americans worried that they will lead the economy into a recession.
“I hate to predict things like that,” Trump responded when asked by Fox News’ Maria Bartiromo during an interview if he expects a recession in 2025. “There is a period of transition, because what we’re doing is very big. We’re bringing wealth back to America.”
Lawmakers, including Republicans, have said that the tariffs could have "devastating" economic impacts on their states.
“The Canadian tariffs will definitely have a detrimental impact on the economy of Maine and on border communities in particular,” Sen. Susan Collins (R-Maine) told The Hill.
What is a recession?
A recession is “a significant decline in economic activity that is spread across the economy and lasts more than a few months,” according to the National Bureau of Economic Research. Some of the factors that determine when a recession is declared include unemployment, personal income and sales, the nonprofit said.
Recessions aren’t declared by the U.S. government but by the NBER. It could take months before the nonprofit decides to declare a recession, according to the Congressional Research Service.
It could take months before the nonprofit decides to declare a recession, the CRS said.
It’s up to lawmakers to make quick decisions when responding to economic downturns, according to the CRS. Read more about what factors are used to indicate a recession here.
What happens during a recession?
During a recession, sales drop, unemployment rates increase and stock investments and home values decrease, according to digital financial institution SoFi.
Since fewer people are employed, they’re less likely to spend money on businesses – which could lead companies to layoffs and bankruptcy declarations, SoFi said.
The last recession was from February 2020 to April 2020, which was the start of the COVID-19 pandemic, according to NBER.
Trump paused 25% tariffs on most goods from Mexico and some from Canada on Thursday. "Reciprocal" tariffs will be implemented on April 2, Trump said.
This story comprises reporting from The Associated Press and The Hill.
Erin Pflaumer is a digital content producer from Long Island who has covered both local and national news since 2018. She joined PIX11 in 2023. See more of her work here.