The China tariff pause has Wall Street scaling back recession calls

Trump's[ latest tariff pause](https://finance.yahoo.com/news/us-and-china-to-slash-tariffs-for-90-days-as-trump-and-xi-likely-to-talk-maybe-at-the-end-of-the-week-101943792.html) has Wall Street reeling back its recession calls.

Discussion of an economic downturn later in 2025[ had surged ](https://finance.yahoo.com/news/strong-labor-market-data-doesnt-mean-the-coast-is-clear-for-the-us-economy-124902024.html)as economists argued Trump's widespread tariffs [would boost inflation and slow economic growth](https://finance.yahoo.com/news/a-wrecking-ball-to-the-economy-why-wall-street-strategists-are-worried-about-stagflation-202352570.html). Now, with the bulk of tariffs on goods from China paused for 90 days — and [optimism around further trade deals building](https://finance.yahoo.com/news/us-china-trade-deal-optimism-offers-important-investing-reminder-144319107.html) — economists argue that economic growth will still slow later this year, but the odds of a recession have diminished.

"The administration's recent dialing down of some of the more draconian tariffs placed on China should reduce the risk that the US economy slips into recession this year," wrote JPMorgan chief US economist Michael Feroli, [who had been the first Wall Street economist to call for a recession](https://finance.yahoo.com/news/jpmorgan-becomes-the-first-wall-street-bank-to-forecast-a-us-recession-following-trumps-tariffs-222019272.html) after Trump's large tariff increase.

"We believe [recession risks are still elevated](https://finance.yahoo.com/news/the-china-tariff-pause-has-wall-street-scaling-back-recession-calls-100054918.html), but now below 50%."