Donald Trump refuses to rule out US recession as he makes admission on trade war

Donald Trump has refused to rule out a recession in the US after a new report claimed the country could be heading for financial difficulties.

While America was last in recession only five years ago in 2020, the recent tariffs introduced by President Trump on Canada, Mexico and China threatens a new one.

The countries two neighbors have been hit with 25 percent tax on all imports into the US, while China's initial 10 percent tariff has been doubled in response to the country's retaliation.

As a result, the Federal Reserve Bank of Atlanta's GDPNow model anticipates that GDP growth for the first quarter of 2025 will fall by -2.8 percent - down from +3.9 percent just a month ago.

Trump has refused to rule out a US recession (Carl Court - Pool/Getty Images)

A country is deemed as being in recession when they enter two consecutive quarters of decline, so predictions are the US could enter a recession later this year.

During a sit down interview with Fox News on Sunday (March 9), the president was asked 'are you expecting a recession this year?'

Trump responded: "I hate to predict things like that. There is a period of transition, because what we’re doing is very big. We’re bringing wealth back to America.

"That’s a big thing. And there are always periods of, it takes a little time. It takes a little time, but I think it should be great for us."

Trump was then asked if he believes the tariffs introduced by his administration would heighten inflation, to which he replied: "You may get it. In the meantime, guess what? Interest rates are down."

Trump reiterated that interest rates are down (JIM WATSON/AFP via Getty Images)

The White House claims Canada, Mexico and China pose an 'extraordinary threat' due to the number of 'illegal aliens and drugs' smuggled into the States, and even constitutes it as a 'national emergency'.

In regards to China specifically, the White House added: "In response to China’s intellectual property theft, forced technology transfer, and other unreasonable behavior, President Trump acted with conviction to impose tariffs on imports from China, using that leverage to reach a historic bilateral economic agreement."

Elsewhere in the Fox News interview, Trump warned that nuclear weapons are the ‘greatest’ threat that could ‘end the world’.

"We spend a lot of money of nuclear weapons - the level of destruction is beyond anything you can imagine," he said.

"It's just bad that you have to spend all this money on something that if it's used, it's probably the end of the world."