Recession Despite Tariff Pause: Berezin’s Analysis

Economist Stands Firm: Trump’s Trade Policies Still Likely to Trigger Recession Despite Tariff Pause

Published: April 2025

While initial market reactions were positive after President Donald Trump announced a pause on some controversial tariffs, one economist is holding firm to his prediction of an impending recession.Peter Berezin, Chief Global Strategist at BCA Research, argues that the damage from the administration’s trade policies may already be done, rendering the tariff pause “too little, too late.”

Berezin initially forecasted in late 2024 that Trump’s aggressive trade tactics would spark a global trade war, ultimately leading to a meaningful market downturn. This prediction gained considerable attention as tensions escalated and markets reacted negatively in the weeks prior to Trump’s announcement.

“I still think it’ll be very difficult to avoid a recession at this point, especially since the 10% blanket tariff remains in place and tariffs were further raised on China,”

Peter Berezin, BCA Research

This statement, delivered via email shortly after the tariff pause announcement, highlights Berezin’s continued skepticism, even as U.S. stocks experienced a surge.

the Apparent Health of the U.S.Economy: A Deeper Look

on the surface, the U.S. economy continues to show signs of strength. Recent jobs reports have surpassed expectations, and while the unemployment rate has seen a slight increase, it remains relatively low. Corporate earnings also displayed resilience in the last quarter.While analyst and consumer sentiment has softened,some argue this could be temporary fluctuation.

However, Berezin contends that the robust fourth-quarter results may be misleading.He suggests that consumers and businesses, anticipating higher tariffs, may have engaged in increased purchasing activity in late 2024 to stockpile goods. This “tariff front-running,” as he calls it, could have artificially inflated economic figures.

“We had this period where people were buying stuff to get ahead of the tariffs as if prices are going to go up in a week, you want to buy today — you don’t want to wait a week,”

Peter Berezin, BCA Research

This behaviour, if widespread, could have significant consequences for future economic performance. The potential problem of “pulled-forward demand” was identified months prior.

The implication is clear: If demand was artificially inflated in Q4 2024, a corresponding drop in spending could be imminent, leading to a decline in corporate earnings and potentially triggering a recession. This is especially concerning for everyday American consumers, who would feel the impact through job losses, reduced investment values, and increased financial insecurity.

economic Indicator	Current Status	Potential Impact of Tariff Front-Running
Job Growth	Positive	Potential for decline as businesses adjust to decreased demand
Unemployment Rate	Low (but rising)	Likely to increase if businesses reduce workforce
Corporate Earnings	Robust (Q4 2024)	Expected to decline as spending normalizes/decreases
consumer Spending	Potentially artificially inflated in Q4 2024	Likely to decrease, exacerbating economic slowdown

The Ongoing Trade War with china: A Key factor

Even with the tariff pause on some countries, the United States’ trade relationship with China remains strained. tariffs on Chinese goods remain in place, impacting a wide range of industries and consumer products.This ongoing trade conflict introduces significant uncertainty into the market, potentially discouraging investment and hindering economic growth.The higher costs associated with these tariffs are often passed on to American consumers,increasing the price of everyday goods.

Expert Perspectives on the Recession Outlook

While Berezin’s viewpoint is notably bearish, other economists offer varying viewpoints on the likelihood and timing of a potential recession. Some argue that the U.S. economy possesses underlying strengths that could mitigate the negative impacts of trade tensions. Others suggest that government intervention, such as fiscal stimulus measures, could help to avert a significant downturn. It’s crucial to consider a range of perspectives when assessing the overall economic outlook. Some analysts believe that the Federal Reserve’s monetary policy decisions will be crucial in determining the economy’s trajectory.

Practical Implications for American Businesses and Consumers

Whether or not a recession is imminent, the current economic climate presents unique challenges and opportunities for American businesses and consumers.

• Businesses: Should carefully monitor inventory levels, manage supply chains effectively, and explore strategies to mitigate the impact of tariffs. Diversifying markets and seeking alternative sourcing options can help reduce reliance on specific countries. Moreover,businesses should prioritize innovation and efficiency to remain competitive in a potentially challenging environment.
• Consumers: Should focus on responsible budgeting, prioritize essential spending, and avoid accumulating excessive debt. Exploring options for refinancing existing loans and seeking out deals and discounts can help stretch their budgets. It’s also crucial to maintain an emergency fund to cushion against unexpected financial hardship.

Conclusion: Navigating an Uncertain Economic Landscape

The U.S. economy faces a complex and uncertain future. While recent market reactions to the tariff pause have been positive, the underlying risks associated with ongoing trade tensions and potential demand reversion remain. By carefully considering expert perspectives, monitoring economic indicators, and taking proactive steps to manage risk, American businesses and consumers can better navigate the challenges and opportunities that lie ahead. A diversified investment portfolio and a long-term financial plan are more significant than ever in these times of economic uncertainty.

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Interview: Economist Peter Berezin on the Rising Recession Risk Despite Tariff Pause

Archyde News – April 2025

Introduction

In the wake of President Trump’s recent pause on certain tariffs, the markets cautiously celebrated. Though, at Archyde News, we certainly know that economic realities are frequently enough more complex. We sat down with Peter Berezin, Chief Global Strategist at BCA Research, to delve deeper into his persistent forecast of an impending recession triggered by the very administration’s trade policies.

The Core Argument: “Too Little, Too Late”

Interviewer: Mr. Berezin, thank you for joining us. Even with the tariff pause,your stance remains firm. Can you explain why you believe the threat of a recession persists?

Peter Berezin: Absolutely. the initial damage from the trade policies may already be done, leading to a very difficult situation to avoid a recession. The 10% blanket tariff remains in place and further tariffs were raised on china, and that’s a significant hurdle.

Deeper Dive into the U.S. Economic Health

Interviewer: The *U.S. economy* seems strong on the surface. Jobs reports are good, and while unemployment ticked up slightly, it’s still low. How are you interpreting these seemingly positive figures for the *U.S.economy*?

Peter Berezin: That’s where it gets tricky. The *robust fourth-quarter results* might potentially be misleading. Businesses and consumers, anticipating higher tariffs, possibly front-loaded purchases. This “tariff front-running,” if widespread, inflates the figures with a short-term boost.

Interviewer: So you’re suggesting a “pulling forward” of demand?

Peter Berezin: Exactly. When people realize the tariffs are coming, they may buy more than they normally would, as if prices will go up next week. This may cause an artificial spike.

Interviewer: What are the potential *ramifications of this artificially inflated demand* on the overall economy?

Peter Berezin: If demand was accelerated in Q4 of 2024, there’s a clear risk of a subsequent drop in spending, which may lead to a drop in company earnings, which might trigger a recession. With the potential of job losses, American consumers will suffer heavily.

The China Trade Factor

Interviewer: Let’s talk about the *trade war* with China.Even with some tariff pauses, it’s still ongoing. How does uncertainty influence economic growth?

Peter Berezin: The ongoing *trade conflict* introduces uncertainty, causing discouragement for investments and hindering growth. The higher costs associated with these tariffs are invariably passed along to the consumer, leading to an increase in prices across goods.

Expert Perspectives and the Path Forward

Interviewer: Other economists have varying opinions. Besides your point of view, what factors could influence the trajectory of the *U.S. economy* moving forward?

Peter Berezin: Others have different perspectives. Some believe in economic strengths, others believe in government interventions. Whatever happens, the Federal Reserve’s *monetary policy* decisions will play a crucial role.

interviewer: What practical steps shoudl *businesses and consumers* be taking in such an uncertain surroundings?

Peter Berezin: Businesses need to watch their inventories, and optimize their supply chains. For consumers, it’s budgeting and saving. A diversified investing strategy along with a long-term financial plan is key.”

Conclusion

Interviewer: Mr. Berezin, thank you for your insights. Considering the *complex economic landscape*, *do you believe the U.S. economy* is at a point of no return, or are there measures that can avert the challenges ahead? What’s your final message for our readers?

Peter Berezin: The future is complex and uncertain. By recognizing risks and taking action, businesses and consumers will get through it together.Staying diversified and having a steady eye on your long-term goals are significantly important.

Call to Action

What are your thoughts on the recession outlook? Share your predictions in the comments below!