ASIATODAY.ID, WASHINGTON – JPMorgan has raised the likelihood of a global recession to 60% following US President Donald Trump’s announcement of sweeping new tariffs, which have shaken financial markets and fueled concerns about a potential global trade war.
“The risk of a global recession this year has increased to 60%, up from 40%,” said Bruce Kasman, Chief Economist at JPMorgan, in a note to clients titled “There Will Be Blood,” as reported by Bloomberg.
Kasman also described the tariffs as the most significant tax increase on US households and businesses since 1968 and cautioned that the impacts could be far-reaching. “This tax hike’s effects are likely to be magnified through retaliation, a decline in US business sentiment, and disruptions in global supply chains,” he added.
In premarket trading on Thursday, the US dollar index fell by 2.16%, hitting its lowest point since October. The declines came after Trump’s decision to impose tariffs ranging from 10% to 50% on a broad range of imports from dozens of countries. Fears of a global trade war have driven investors to seek safer assets.
Although JPMorgan has not revised its forecasts yet, Kasman warned that the full implementation of these policies could deliver a “substantial macroeconomic shock.” He emphasized, “If these policies are sustained, they would likely push the US and potentially the global economy into recession this year.”
Goldman Sachs has also adjusted its outlook, increasing the likelihood of a US recession in 2025 from 20% to 35% in light of new US policies. Earlier this week, Deutsche Bank raised alarms about a potential dollar crisis as a result of these tariffs.
Singapore Prime Minister Warns of Global Crisis
Meanwhile, Singapore’s Prime Minister, Lawrence Wong, warned that President Trump’s new tariff policies signify the end of the rule-based era of globalization and could trigger a new global economic crisis. In a speech posted on his personal YouTube channel, Wong emphasized that the world is entering a far more protectionist, arbitrary, and dangerous phase, particularly for small, open economies like Singapore, which are highly vulnerable to external shocks.
The US’s new policy of reciprocal tariffs, announced in a statement titled “Liberation Day” by Trump, marks a major shift in international trade dynamics. Under this policy, Singapore faces a 10% tariff, while countries like Indonesia face even higher tariffs, reaching up to 32%. Although Wong acknowledged that Singapore’s tariffs are relatively lower, he warned that the long-term consequences for the global economy could be profound and worrying.
“The era of rule-based globalization and free trade is over. The US is no longer merely reforming multilateral systems like the WTO but is abandoning them entirely,” Wong said in his video message on Friday, April 4, 2025.
Wong noted that the US’s decision to impose tariffs against individual countries represents a direct rejection of the WTO framework, which has been crucial for global trade stability. While the direct impact on Singapore may be limited, Wong cautioned that the systemic damage to the global economic order could be far-reaching.
“If other countries follow the US’s lead and abandon multilateralism in favor of bilateral interests, small nations like Singapore could be marginalized and excluded from global trade,” he warned.
Wong further stressed that high tariffs and international policy uncertainty would weaken global trade and investment, slowing economic growth worldwide. Given Singapore’s heavy reliance on foreign trade, the country is likely to face harsher impacts than many others. Drawing a historical parallel, Wong likened the current situation to the global protectionism of the 1930s, which eventually contributed to the outbreak of World War II.
“No one can predict how the situation will evolve in the coming months or years. However, we must be clear-eyed and vigilant against the growing dangers in the world,” Wong cautioned.
Global Institutions at Risk
Wong also pointed out that global institutions are weakening, while international norms continue to erode. In this environment, more countries are likely to act based on their own interests, using power and pressure to achieve their objectives. According to Wong, this is the current reality of the world.
Singapore Government’s Response
In response to the escalating global tensions, the Singaporean government is committed to strengthening national resilience, enhancing internal capabilities, and expanding cooperation with like-minded nations.
“We are better prepared than many other countries, but we must remain cautious. More shocks are likely to come,” Wong asserted.
The Prime Minister concluded his speech with a call for unity and vigilance, emphasizing that global security and stability may not return anytime soon, and the regulations protecting small countries could disappear.
“We must be mentally prepared. The road ahead will be more challenging. But if we remain alert and united, Singapore will be able to endure in this wounded world,” Wong concluded. (AT Network)
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