Two economists believe the Trump tariffs will have a deep impact on the global economy but a third says other factors will have to come into play to push it to the brink.
00:00The possibility of a recession following the imposition of new tariffs by the U.S. cannot be ruled out, but its severity will depend on several factors.
00:10TKS Yugenjian of Beit Alamana and Nazaret Ismail of University Malaya rate the risk of such an outcome at the global level as very high.
00:19But Nazaret's colleague, Golim Thai, believes it will come to pass only if tensions build up.
00:24Yugenjian said the tariffs would raise costs for the average American, leading to decreased disposable income and a drop in consumer and business confidence.
00:34He warned this would trigger a recession in the U.S. that would eventually spread across the globe.
00:39Yugenjian said even emerging economic powers like China and India would not be able to fully offset the impact of a U.S. recession,
00:47as the U.S. remains the dominant financial hub and the dollar continues to be the leading reserve currency.
00:53Meanwhile, Nazaret said that in addition to the tariffs raising costs and reducing consumer spending,
00:58the U.S. trade deficit, the dollar's reserve status, and a debt-driven financial system would also contribute to the risk of a recession.
01:06However, Golim said that while a global recession was possible, it would depend on several factors,
01:11including supply chain disruptions from a broader trade war.
01:14He said such a disruption might be possible if the affected countries responded to the new tariffs with retaliatory measures,
01:21which would disrupt trade, raise costs, weaken confidence, and increase their risk of a global recession.
