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Tariffs are fueling fears of a recession. What does it take to actually declare one?

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Tariffs are fueling fears of a recession. What does it take to actually declare one?

Employees in the trading room of Nordea Markets follow Monday’s sharp stock market declines in Oslo. The Trump administration’s tariffs are fueling concerns about the prospect of a recession, in the U.S. and globally.

Ole Berg-Rusten/NTB/AFP via Getty Images


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Ole Berg-Rusten/NTB/AFP via Getty Images

The Trump administration’s new tariffs on imported goods from countries around the world have rattled consumers, stoked a trade war, roiled global markets and fueled widespread concerns about the prospect of a recession, both in the U.S. and globally.

In the days since President Trump announced the sweeping baseline and “reciprocal” tariffs, Google searches for the term “recession” have surged and economists at prominent investment banks have pointed to increased odds of a recession occurring.

In a Sunday note to clients, Goldman Sachs raised the probability of a U.S. recession from 35% to 45% — and that’s assuming the tariffs are rolled back. If the country-specific tariffs take effect Wednesday as intended, the firm says, “we would revise our forecast to include a recession.”

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In a research report last week titled “There Will Be Blood,” JP Morgan upped its risk of a global recession to 60% from 40% before the tariff announcement.

Its CEO Jamie Dimon doubled down on Monday, writing in his annual letter to investors that the tariffs “will likely increase inflation” and are prompting “many to consider a greater probability of a recession.”

“Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth,” Dimon wrote.

There are growing calls for Trump to delay or reduce the tariffs coming from Wall Street, Capitol Hill and around the world. Administration officials said Sunday that more than 50 countries have reached out to begin negotiations — but have also said the tariffs will not be postponed.

In an interview with NBC’s “Meet the Press” on Sunday, Treasury Secretary Scott Bessent downplayed concerns about a recession, saying, “We’re going to hold the course.” Pointing to March’s better-than-expected jobs report, he said he sees “no reason that we have to price in a recession.”

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“There doesn’t have to be a recession,” he added. “Who knows how the market is going to react in a day, in a week. What we are looking at is building the long-term economic fundamentals for prosperity.”

With all this talk about a potential recession, it’s worth taking a look at what the term actually means — and who decides when it applies.

What is a recession? 

A recession refers to a period of decline in economic activity. It’s one of the four stages of the economic cycle: growth, peak, contraction (or recession) and trough.

Some analysts use a rough rule of thumb to identify recessions: Two consecutive quarters of decline in a nation’s gross domestic product (GDP) — the broadest measure of economic activity. 

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But the National Bureau of Economic Research (NBER) — the nonpartisan, nonprofit research organization that has become the semi-official arbiter of recessions — uses a somewhat squishier definition. It calls a recession a “significant decline in economic activity that is spread across the economy and that lasts more than a few months.”

Who declares a recession? 

The job of documenting the economic cycles, including recessions, does not fall to the federal government.

Instead, the NBER’s Business Cycle Dating Committee — made up of top American economists — has been declaring the beginning and end of the cycles since its creation in 1978 (NBER itself is decades older).

There is no fixed rule about how long NBER takes to identify a recession after a decline has started. It says on its website that past determinations have taken anywhere from four to 21 months.

“We wait long enough so that the existence of a peak or trough is not in doubt, and until we can assign an accurate peak or trough date,” NBER says.

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For example, it announced in June 2020 that the U.S. had officially entered a pandemic-induced recession months earlier, in February. It announced over a year later that the 2020 recession had ended in April after just two months, making it the shortest U.S. recession on record.

What happens in a recession? 

A shrinking economy can cause a cascade of stressful ripple effects, including lower employment, deteriorating stock market results and higher borrowing costs for consumers and companies, according to Fidelity.

For example, people may not want to spend as much, which can impact the businesses they would otherwise support, which can lead to layoffs and in turn harm companies’ performance in the stock market — further fueling the cycle.

Mark Zandi, chief economist at Moody’s Analytics, told NPR last week that consumer confidence and discretionary spending were already on the decline. He said the possibility of even broader tariffs — which were announced the following day — could speed up the path to a recession.

“It’s the consumer that’s feeling the brunt of it first, and with good reason,” he said. “But … the way you get to recession is businesses see the weakening in their sales, and if they start laying off workers, then we’re done. We’re going into a recession.”

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How rare are recessions?

 Various factors can jolt the economy into a recession, from unexpected events (like pandemics and wars) to asset bubbles bursting to excessive inflation or deflation.

The U.S. has experienced 34 recessions since 1857, according to NBER data.

They varied considerably in length, from two months (2020) to over five years (The Panic of 1873, which triggered the “Long Depression”).

Since World War II, the average length of a recession has been 11.1 months, according to the business publication Kiplinger. The post-WWII U.S. has averaged a recession every 6.5 years, it adds.

The longest post-WWII recession was the Great Recession, which spanned 18 months from December 2007 to June 2009 and was triggered when the U.S. housing bubble burst. The most recent was the brief COVID-19 recession in 2020. While the economy experienced two quarters of negative GDP growth in early 2022, fueling fears of a recession, NBER did not declare one.

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Depressions are much more severe and rare: Merriam-Webster says they are characterized by widespread unemployment and major pauses in economic activity. NBER does not specifically identify depressions, but says the U.S. is generally regarded to have last experienced one in the 1930s.

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Amazon accused of listing products from independent shops without permission

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Amazon accused of listing products from independent shops without permission

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Amazon has been accused of listing products from independent retailers without their consent, even as the ecommerce giant sues start-up Perplexity over its AI software shopping without permission.

The $2.5tn online retailer has listed some independent shops’ full inventory on its platform without seeking permission, four business owners told the Financial Times, enabling customers to shop through Amazon rather than buy directly.

Two independent retailers told the FT that they had also received orders for products that were either out of stock or were mispriced and mislabelled by Amazon leading to customer complaints.

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“Nobody opted into this,” said Angie Chua, owner of Bobo Design Studio, a stationery store based in Los Angeles.

Tech companies are experimenting with artificial intelligence “agents” that can perform tasks like shopping autonomously based on user instructions.

Amazon has blocked agents from Anthropic, Google, OpenAI and a host of other AI start-ups from its website.

It filed a lawsuit in November against Perplexity, whose Comet browser was making purchases on Amazon on behalf of users, alleging that the company’s actions risked undermining user privacy and violated its terms of service.

In its complaint, Amazon said Perplexity had taken steps “without prior notice to Amazon and without authorisation” and that it degraded a customer shopping experience it had invested in over several decades.

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Perplexity in a statement at the time said that the lawsuit was a “bully tactic” aimed at scaring “disruptive companies like Perplexity” from improving customers’ experience.

The recent complaints against Amazon relate to its “Buy for Me” function, launched last April, which lets some customers purchase items that are not listed with Amazon but on other retailers’ sites.

Retailers said Amazon did not seek their permission before sending them orders that were placed on the ecommerce site. They do not receive the user’s email address or other information that might be helpful for generating future sales, several sellers told the FT.

“We consciously avoid Amazon because our business is rooted in community and building a relationship with customers,” Chua said. “I don’t know who these customers are.”

Several of the independent retailers said Amazon’s move had led to poor experiences for customers, or hurt their business.

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Sarah Hitchcock Burzio, the owner of Hitchcock Paper Co. in Virginia, said that Amazon had mislabelled items leading to a surge in orders as customers believed they were receiving more expensive versions of a product at a much lower price.

“There were no guardrails set up so when there were issues there was nobody I could go to,” she said.

Product returns and complaints for the “Buy for Me” function are handled by sellers rather than Amazon, even when errors are produced by the Seattle-based group.

Amazon enables sellers to opt out of the service by contacting the company on a specific email address.

Amazon said: “Shop Direct and Buy for Me are programmes we’re testing that help customers discover brands and products not currently sold in Amazon’s store, while helping businesses reach new customers and drive incremental sales.

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“We have received positive feedback on these programmes. Businesses can opt out at any time.”

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Trump says Venezuela will turn over 30 million to 50 million barrels of oil to US | CNN Business

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Trump says Venezuela will turn over 30 million to 50 million barrels of oil to US | CNN Business

President Donald Trump said Tuesday night that Venezuela will turn over 30 million to 50 million barrels of oil to the United States, to be sold at market value and with the proceeds controlled by the US.

Interim authorities in Venezuela will turn over “sanctioned oil” Trump said on Truth Social.

The US will use the proceeds “to benefit the people of Venezuela and the United States!” he wrote.

Energy Secretary Chris Wright has been directed to “execute this plan, immediately,” and the barrels “will be taken by storage ships, and brought directly to unloading docks in the United States.”

CNN has reached out to the White House for more information.

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A senior administration official, speaking under condition of anonymity, told CNN that the oil has already been produced and put in barrels. The majority of it is currently on boats and will now go to US facilities in the Gulf to be refined.

Although 30 to 50 million barrels of oil sounds like a lot, the United States consumed just over 20 million barrels of oil per day over the past month.

That amount may lower oil prices a bit, but it probably won’t lower Americans’ gas prices that much: Former President Joe Biden released about four to six times as much — 180 million barrels of oil — from the US Strategic Petroleum Reserve in 2022, which lowered gas prices by only between 13 cents and 31 cents a gallon over the course of four months, according to a Treasury Department analysis.

US oil fell about $1 a barrel, or just under 2%, to $56, immediately after Trump made his announcement on Truth Social.

Selling up to 50 million barrels could raise quite a bit of revenue: Venezuelan oil is currently trading at $55 per barrel, so if the United States can find buyers willing to pay market price, it could raise between $1.65 billion and $2.75 billion from the sale.

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Venezuela has built up significant stockpiles of crude over since the United States began its oil embargo late last year. But handing over that much oil to the United States may deplete Venezuela’s own oil reserves.

The oil is almost certainly coming from both its onshore storage and some of the seized tankers that were transporting oil: The country has about 48 million barrels of storage capacity and was nearly full, according to Phil Flynn, senior market analyst at the Price Futures Group. The tankers were transporting about 15 million to 22 million barrels of oil, according to industry estimates.

It’s unclear over what time period Venezuela will hand over the oil to the United States.

The senior administration official said the transfer would happen quickly because Venezuela’s crude is very heavy, which means it can’t be stored for long.

But crude does not go bad if it is not refined in a certain amount of time, said Andrew Lipow, the president of Lipow Oil Associates, in a note. “It has sat underground for hundreds of millions of years. In fact, much of the oil in the Strategic Petroleum Reserve has been around for decades,” he wrote.

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Video: Nvidia Shows Off New A.I. Chip at CES

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Video: Nvidia Shows Off New A.I. Chip at CES

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Nvidia Shows Off New A.I. Chip at CES

At the annual tech conference, CES, Nvidia showed off a new A.I. chip, known as Vera Rubin, which is more efficient and powerful than previous generations of chips.

This is the Vera CPU. This is one CPU. This is groundbreaking work. I would not be surprised if the industry would like us to make this format and this structure an industry standard in the future. Today, we’re announcing Alpamayo, the world’s first thinking, reasoning autonomous vehicle A.I.

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At the annual tech conference, CES, Nvidia showed off a new A.I. chip, known as Vera Rubin, which is more efficient and powerful than previous generations of chips.

By Jiawei Wang

January 6, 2026

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