Global Trade Tensions Ease as Trump Suspends Retaliatory Tariffs

Wednesday 9th of April 2025 20:21:09

US Recession Odds Drop as Trump Pauses Reciprocal Tariffs

The odds of a US recession have dropped significantly as President Donald Trump announced that he will be pausing the implementation of reciprocal tariffs on steel and aluminum imports.

According to a report by the Economic Cycle Research Institute (ECRI), the probability of a US recession within the next 12 months has decreased to 32.3%, down from 42.1% just a week ago.

The ECRI's Weekly Leading Index (WLI) has also seen a significant improvement, rising to 134.4 from 131.1 last week. The WLI is a proprietary indicator that measures the strength of the US economy and has been shown to accurately predict recessions.

Trump's decision to pause the tariffs was met with widespread approval from the business community, as many had feared that the tariffs would lead to a trade war and ultimately harm the US economy.

"We are pleased that the President has decided to put the brakes on these tariffs," said Thomas Donohue, President of the US Chamber of Commerce. "This is a big win for American businesses and workers, and we hope that it will help to calm the waters in the global economy."

The US Chamber of Commerce had been one of the most vocal opponents of the tariffs, arguing that they would lead to higher costs for American consumers and businesses.

The pause in the tariffs is seen as a temporary measure, and many are still waiting to see what Trump will do in the long term. However, for now, the decision has helped to ease concerns about a potential recession.

"This is a positive development for the US economy," said Mark Zandi, Chief Economist at Moody's Analytics. "The tariffs were a major source of uncertainty, and by pausing them, the President has helped to reduce that uncertainty. This should help to boost business confidence and investment."

Overall, the decision to pause the tariffs is seen as a step in the right direction for the US economy, and many are hoping that it will help to avoid a recession.