* As the tariff turmoil escalates and the risks of inflation rise once again, economists and market participants are increasingly concerned about whether the "hard way" Trump refers to will lead to an economic recession or even stagflation.

* Under the tariff chaos, while economic activity slows down, prices may rise. Some economists worry that if this situation continues, it could lead the U.S. economy into stagflation.

by Xiong Maoling

WASHINGTON, March 16 (Xinhua) -- With key U.S. economic indicators showing concerning trends, economists and investors warn that the risk of a "Trumpcession" has grown due to unpredictable trade and economic policies.

For many American voters, Donald Trump had been seen as a hope for alleviating inflation and improving the economic outlook during his election campaign.

However, nearly two months after returning to the White House, the U.S. president said that he is doing it the "hard way," seemingly telling the American public to adjust their expectations for the U.S. economy.

GROWING CONCERNS ABOUT TARIFF FALLOUT

As the tariff turmoil escalates and the risks of inflation rise once again, economists and market participants are increasingly concerned about whether the "hard way" Trump refers to will lead to an economic recession or even stagflation.

On Wednesday, the 25-percent steel and aluminum tariffs imposed by the Trump administration on all trading partners officially went into effect, with no exemptions. This policy quickly provoked retaliation from Canada and the European Union (EU), which then prompted Trump to threaten a 200-percent tariff on alcoholic products from the EU on Thursday.

These developments, along with Trump's recent "on-and-off" tariff policies toward Mexico and Canada, have led to a sharp drop in the U.S. stock market over the past few weeks, indicating a significant decline in investor confidence.

"Tariff uncertainty has captured most of the blame for the selling pressure and is exacerbating economic growth concerns," said Adam Turnquist, chief technical strategist at LPL Financial, in a note Thursday.

In an interview with Fox News earlier this month, when asked if he expected a recession this year, Trump said: "I hate to predict things like that," noting that "there is a period of transition." On Tuesday, when asked at the White House "Do you think there will be a recession?" Trump said, "I don't see it at all."

"I can do it the easy way or the hard way. The hard way to do it is exactly what I'm doing. But the results are going to be 20 times greater," Trump told reporters.

U.S. Treasury Secretary Scott Bessent said Thursday on CNBC that he is not concerned about "a little bit of volatility over three weeks." Bessent said the Trump administration is focused on the "real economy" and the outlook for the long term.

"The full-court press" by Trump and his officials "signals they are under a great deal of pressure from people they listen to -- the stock market, Republican lawmakers, and business leaders," The New York Times quoted Kate Kalutkiewicz, the senior managing director at McLarty Associates, an advisory firm, as saying. Kalutkiewicz worked on the National Economic Council in Trump's first term.

Although business leaders have generally not publicly opposed Trump's tariff policies, some companies have already warned about the negative consequences that these policies could bring.

Retail giants like Walmart and Target predicted in their recent earnings calls that consumer spending would decline due to the economic uncertainty caused by Trump's tariff threats. Delta Air Lines recently cut its profit forecast in half, warning that economic uncertainty was causing potential passengers to reconsider their travel plans.

The National Federation of Independent Business (NFIB) Small Business Optimism Index released Tuesday fell for the second consecutive month in February to 100.7, while the uncertainty index rose to 104 -- its second-highest level on record.

"The recent flurry of tariff activity appears to have dented economic expectations and put upward pressure on small business prices," economists at Wells Fargo wrote in an analysis.

In a note on Monday, Jan Hatzius, chief economist at Goldman Sachs, significantly downgraded the U.S. GDP growth forecast for 2025 from 2.4 percent to 1.7 percent. He stated that the reason for the downgrade was that trade policy assumptions have become "considerably more adverse" and the administration is "managing expectations towards tariff-induced near-term economic weakness."

PESSIMISTIC ESTIMATES ABOUT ECONOMY

Dean Baker, a senior economist at the Center for Economic and Policy Research, told Xinhua: "I'm quite certain many businesses are putting off hiring both because of Trump's trade policy and also the erratic cuts to the government budget."

"This virtually ensures slower growth, which increases the risk of a recession," said Baker, adding that he does not know whether "what we have seen to date will actually cause a recession."

On Wednesday, Bruce Kasman, JPMorgan's chief global economist, expressed heightened concerns about the U.S. economy. He told reporters in Singapore that the investment bank now estimates a 40 percent chance of a U.S. recession this year.

Some economists are more pessimistic. "I think we've seen a sea change in perception in the almost two months since President Trump was inaugurated," Lawrence Summers, professor and president emeritus at Harvard University, wrote on X, estimating that the chance of the U.S. economy entering a recession is now close to 50 percent.

Summers highlighted the combination of "substantial immigration restrictions, substantial layoffs in the federal government," and "the damage to U.S. competitiveness and to U.S. production done by tariffication."

Uncertainty is the keyword at the moment. Art Hogan, chief market strategist at B. Riley Wealth Management, said that investors are concerned this will become an own-goal manufactured economic slowdown. "We don't know what the endgame is," he was quoted by CNN as saying.

Under the tariff chaos, while economic activity slows down, prices may rise. Some economists worry that if this situation continues, it could lead the U.S. economy into stagflation.

Baker told Xinhua that "various measures of expectations show that both consumers and businesses are expecting higher inflation."

"With Trump adding tariffs to the mix, there is very little chance that the rate will drop to the 2 percent target," Gary Clyde Hufbauer, a nonresident senior fellow at the Peterson Institute for International Economics, told Xinhua. "My guess is that inflation will persist in the range of 3.0 percent to 3.8 percent for the next 6 months," he said.

NBC News said in a report that "rather than reignite the economy, Trump's unusual and unprecedented economic policies, like tariffs, tax cuts and spending reductions, are raising the specter of not only a recession, but also stagflation: sustained price increases, but no growth to go along with it."

U.S. Commerce Secretary Howard Lutnick said in an interview with CBS on Tuesday that even if Trump's economic policies could lead to a recession, these policies are still "worth it." The ultimate answer to whether they are "worth it," however, will come from ordinary Americans who are affected.

A new poll by CNN shows that, as markets decline and investors express concerns about Trump's trade policies, 56 percent of Americans disapprove of Trump's economic policies, while only 39 percent approve of his tariff policies.