Elon Musk has predicted that President Donald Trump’s tariff policies could trigger a recession in the United States by the end of this year. This remark comes amid an ongoing feud between the Tesla CEO and the Trump administration, particularly concerning economic strategies. Musk has expressed disappointment in a recent spending bill proposed by the White House, emphasizing his divergence from the administration’s economic policies.
Despite his support for Trump’s 2024 Election campaign, Musk has not shied away from critiquing Trump’s sweeping tariffs, which impose taxes on imports of goods and services. In a recent post on social media, Musk warned, “The Trump tariffs will cause a recession in the second half of this year.” Notably, a contraction in the US gross domestic product (GDP) of 0.2 percent in the first quarter of 2025 suggests that Musk’s concerns may not be unfounded.
The potential impact of these tariffs has raised alarms among economists and the business community, as they are seen to contribute to inflation. The Organization for Economic Co-operation and Development (OECD) has also weighed in, projecting that the US economy’s growth will slow significantly—from 2.8 percent in 2004 to just 1.6 percent in the current year. This outlook reflects a downward revision in growth forecasts from the OECD, which anticipates inflation may rise before easing in 2025.
While Musk’s warnings echo widespread economic concerns about the potential impacts of protectionist policies, they also highlight a complicated dynamic as Musk continues to publicly support a candidate whose strategies he critiques. There remains a hope that this friction between economic policy and political allegiance may spark dialogue aimed at rectifying the tensions in the economy.
Overall, Musk’s statements and the accompanying forecasts emphasize the critical intersection of politics and economic health, serving as a cautionary signal for what could lie ahead if current trends persist.