Trump won’t rule out a recession: this is what it would mean for your personal finances

President Donald Trump isn’t predicting a recession. But he’s not ruling one out either.

Asked on Fox News if his trade war tactics could trigger a downturn this year, Trump called it a “period of transition” and insisted his tariffs are about “bringing wealth back to America.”

Translation: buckle up.

If you’ve been following the headlines, you know that Wall Street is nervous, and investors don’t like mixed signals. Trump’s back-and-forth on tariffs – first imposing, then partially lifting, then threatening to increase them again – has markets whipsawed. And now, economists and investors alike are bracing for what could come next.

So, if a recession does hit, what will it mean for your job, savings, and everyday costs? Let’s break it down, but don’t expect to feel better about it.

What a U.S. recession could mean for you

Trump’s newest trade play landed last week, when he slapped 25% tariffs on imports from Mexico and Canada, alongside a fresh round of duties on Chinese goods. His rationale? Those countries aren’t doing enough to stop the flow of fentanyl into the U.S. – a problem that’s undoubtedly real, but experts and critics alike warn the economic fallout could be severe.

For a moment, Trump backed off, exempting many imports from Mexico and some from Canada – but only until April 2. After that, he’s threatening a worldwide regime of “reciprocal tariffs”.

Commerce Secretary Howard Lutnick insists “there’s going to be no recession in America”, but even he admits that consumers will see higher prices on foreign-made goods. “He’s not going to step off the gas,” Lutnick said on Meet the Press.

Higher prices, lower purchasing power

If you think inflation has already been eating away at your paycheck, tariffs are like throwing a bucket of note-loving termites into the mix. When foreign goods – from cars to groceries to electronics – are hit with tariffs, guess who pays? You do.

Companies simply pass those costs on to consumers, making everyday life more expensive. And your wages are unlikely to keep pace.

How recessions hurt jobs and healthcare

“What about jobs?” you ask. Well, tariffs also threaten U.S. companies that rely on global supply chains, from auto manufacturers to farmers. If their costs spike and demand drops, layoffs are often the next step. During past downturns, millions lost their jobs, and finding new ones wasn’t easy. As Trump potentially dials up the trade fight, hiring could freeze, and pink slips could start flying.

In the U.S., lose your job and you probably lose your health insurance, too. The last recession saw nearly 8 million people lose coverage within months.

And when coverage is gone, medical costs can become devastating. Private insurance without an employer is usually far more expensive – and if you can’t pay? Hospitals still send the bill.

Then there are your investments and your savings, many aligned with your retirement funds. And when it comes to credit, well, banks tend to pull back on lending. Even if you have good credit today, getting a mortgage, car loan, or credit card could become much harder.

What can you do now to prepare for Trump’s recession?

Obviously, fingers are crossed (by most) that the worst case scenarios don’t play out, but given that markets are somewhat spooked by the uncertainty Trump is creating, it’s better to be prepared.

Here are five tips from financial experts, although each will depend on your current circumstances:

• Grow your savings: build an emergency fund that covers at least three to six months of expenses.
• Pay off debt: especially high-interest debt like credit cards.
• Cut spending: trim subscriptions, dine out less, and shop smart for insurance or utilities.
• Sharpen job skills: update your resume, take courses, and be ready if layoffs hit.
• Stay invested: don’t pull out of retirement accounts in a panic – long-term strategies are your friend.

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