Musk says Trump tariffs will cause a recession later this year

Katherine Li

Thu, Jun 5, 2025, 9:11 PM 2 min read

• Elon Musk predicted Trump's tariffs will trigger a recession later this year.

• Musk's comment comes amid a growing public fallout with the president.

• Wall Street has expressed similar concerns over Trump's tariffs.

Elon Musk predicted Donald Trump's tariffs will send the economy into recession, one of many verbal barbs the tech billionaire threw at the president on Thursday as their relationship collapsed into acrimony.

"The Trump tariffs will cause a recession in the second half of this year," Musk wrote on X while reposting another tweet that called Trump's tariffs "super stupid."

The morning began with Trump saying he was disappointed by Musk's opposition to his "One Big Beautiful Bill" during a press appearance to welcome the German Chancellor to the White House.

The feud intensified when Musk called out Trump's "ingratitude," and suggested establishing a new political party. The SpaceX cofounder also proposed decommissioning the company's Dragon spacecraft after Trump threatened to cut his government contracts, although Musk backed off that idea pretty quickly on X.

Fractures between the two emerged after Musk left his role recently at the White House. On Tuesday, Musk blasted the Republicans' tax-and-spending-cut bill, which Trump helped to shepherd through the House, calling it "pork-filled'" and a "disgusting abomination."

Musk isn't alone in criticizing the potential fiscal impact of this legislation. The nonpartisan Congressional Budget Office estimated it could increase deficits by $2.4 trillion over a decade.

Other experts also agree with Musk that Trump's tariffs could have a negative impact on the US economy.

JPMorgan predicted a 60% chance of a US recession after Trump imposed sweeping tariffs on April 2. The bank adjusted the possibility down to below 50% recently after Trump paused most of his highest tariffs.

In a March interview with Fox News, Trump had also declined to rule out the possibility of a recession.

"I hate to predict things like that," said Trump.

"There is a period of transition," he added, "because what we're doing is very big. We're bringing back wealth to America. That's a big thing, and there are always periods of, it takes a little time, it takes a little time."

Read the original article on Business Insider