Resolution criteria
This market resolves to "Yes" if the United States enters a recession that can be primarily attributed to Donald Trump's tariff policies and trade war actions during his second term. It resolves to "No" if no recession occurs or if a recession occurs but cannot be primarily attributed to Trump's trade policies.
A recession is defined as two consecutive quarters of negative GDP growth as reported by the U.S. Bureau of Economic Analysis.
Background
Donald Trump has proposed significant tariffs if elected to a second term, including:
A universal 10% tariff on all imports
Additional tariffs of 60% or more on Chinese goods
Tariffs of up to 100-150% on certain products from specific countries
These proposed tariffs would be substantially higher than those implemented during his first term, when he imposed tariffs of 25% on steel, 10% on aluminum, and various tariffs on Chinese goods.
Considerations
Economic experts are divided on the impact of Trump's proposed tariffs. Some economists warn they could reduce GDP growth by approximately one percentage point and increase inflation.
Tariffs typically raise prices for consumers and businesses, potentially reducing purchasing power and business investment.
The Federal Reserve's ability to respond to economic conditions may be complicated by tariff-induced inflation.
Market uncertainty about trade policy could itself impact business investment decisions.
Other factors beyond tariffs could contribute to or prevent a recession, including monetary policy, global economic conditions, and fiscal policy.