Traders Worry About U.S. Recession After Trump’s New Tariff Plan
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Speculators on Polymarket, a popular betting site for real-world events, are putting large amounts of money on the chance that the U.S. will fall into a recession by 2025.
After former President Donald Trump announced a new set of tariffs called “Liberation Day” duties, the betting odds for a recession jumped from 39% to nearly 50%. These changes in prediction markets reflect growing fears about the impact of these economic policies.
Tariffs Spark Market Panic and Investor Doubt
On April 2, 2025, Trump revealed a 10% tariff on all imported goods, along with extra duties targeting about 90 countries, including major trade partners like China, Canada, Mexico, and the European Union.
As it stands, the president’s team argued that these steps were needed to fix trade issues and protect American jobs. However, many economists both within and outside the country warned that such a move could damage both the U.S. and global economies by raising prices and disrupting global supply chains.
Just one day later, stock markets reacted strongly. The Dow Jones Industrial Average dropped by 1,630 points, marking one of its worst days in years. The S&P 500 and Nasdaq also saw heavy losses, falling similarly to their worst performances since the 2020 pandemic. Even the cryptocurrency market took a hit—Bitcoin fell 6.7%, and the overall digital asset space dropped more than 5%. This quick and harsh reaction added fuel to recession fears.
Recession Bets Grow Alongside Political Tension
As the economic fallout grew, more than $1.1 million was wagered on Polymarket about a possible U.S. recession. The prediction rose sharply after Trump’s announcement and has stayed high since. Many users on the platform have also turned the comment section into a political debate, pointing fingers at Trump supporters and warning about his policies. Some users reminded others of earlier warnings that Trump’s actions could harm the economy.
By Thursday afternoon, the U.S. stock market had lost around $2.85 trillion in value, with the S&P 500 suffering the most. With the betting odds staying close to 50%, investors and everyday Americans alike are now watching the economy more closely than ever.
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