Are Tariffs Pushing Us Into Recession? Here’s What You Should Really Be Watching
Is the U.S. teetering on the edge of a recession because of tariffs? Or is something much deeper brewing under the surface?
If you’ve been following the news, you’ve probably heard economic experts and media pundits pinning the stock market’s volatility and economic uncertainty on tariffs. While that might make headlines, it’s far from the whole story. I’m here to break it down for you.
Are We in a Recession Already?
Let’s get this out of the way: I believe we are already in a recession—whether they want to call it that officially or not. The traditional definition of a recession is two consecutive quarters of declining GDP. But what most people miss is how government spending props up GDP.
Roughly 25% of our GDP is government spending. So, even if you’re seeing small gains in GDP, it’s likely due to money pumped into the economy by government stimulus and debt. That doesn’t reflect true economic health. Strip out the spending, and we’re likely already in contraction.
Jamie Dimon’s Warning and the Role of Tariffs
JP Morgan CEO Jamie Dimon recently said a recession is a “likely outcome,” citing tariffs as one potential factor. But tariffs are more of a symptom or an accelerant—not the root cause.
The real issue? A slowdown in the velocity of money. When money stops moving—when consumers hold back, businesses stop hiring, and companies start trimming the fat—everything slows down. And we’re already seeing it:
Auto loan delinquencies: 8.1% of borrowers are at least 30 days late.
Mortgage delinquencies: Especially high with FHA and VA loans, reaching up to 11%.
Savings rates: 78% of Americans have less than $2,000 in savings.
What’s Really Driving the Recession
It’s not just tariffs. It’s the culmination of:
Artificial growth from massive stimulus spending in 2020–2021.
Rising interest rates increasing the burden of consumer and government debt.
Slowing wage growth combined with inflation.
Layoffs across industries—not just entry-level or service jobs, but mid- and high-level professionals too.
We had a huge economic “party” fueled by stimulus. And now? We’re dealing with the hangover.
Are Tariffs Making It Worse?
Potentially. Tariffs can slow the flow of money internationally. If trade gets too expensive, prices rise, consumers pull back, and companies stall expansion. It happened in the 1930s with the Smoot-Hawley Tariff Act, and it could happen again.
However, if tariffs are used as a negotiation tactic to bring manufacturing back to U.S. soil, they could create long-term job growth. That’s the tightrope we’re walking right now.
What Should You Be Doing With Your Money?
This isn’t about fear. It’s about strategy.
- Get Liquid: Keep your cash accessible.
- Avoid Overvalued Markets: The Buffet Indicator shows the stock market is still over 180% of GDP. That’s double where it should be.
- Move to Real Assets: Real estate—especially cash-flowing real estate—tends to hold value during recessions.
- Store Cash Smartly: My preferred method is through high-dividend infinite banking policies earning 6% tax-free.
Final Thoughts
Are tariffs the cause of a coming recession? Probably not. But they could be the trigger that tips us over the edge. The real issue is structural—our economy is bloated with artificial growth and debt-fueled consumption. The time to protect and reposition your money is now.
Don’t get caught chasing gains in an inflated stock market. Get ahead of the curve. Stay liquid, stay protected, and invest where your money can earn real returns with real control.