The economic outlook for the United States remains highly uncertain, with persistent warnings about a potential recession on the horizon. Despite some recent positive indicators, a prominent strategist from BCA Research suggests that the nation’s economic fate could largely hinge on policy decisions made by President Donald Trump.
The Pivotal Role of Tariff Policy
According to Peter Berezin, the chief global strategist at BCA Research, avoiding an economic downturn in 2025 might depend critically on a shift in President Donald Trump’s trade stance. In a publication from June 6, Berezin indicated that if President Trump were to roll back current tariff policies and adopt a less protectionist approach, the U.S. economy could potentially sidestep a contraction. This optimistic scenario is further bolstered if bond markets remain unconcerned by the nation’s expanding fiscal deficits.
Berezin’s analysis comes amidst ongoing discussions surrounding President Trump’s proposed “One Big Beautiful Bill,” a budget package that has raised concerns regarding its potential impact on the federal debt. “Should President Trump significantly reduce tariffs and the bond market continues to disregard the increasing deficit projections, we might, by chance, avoid a recession this time. It’s a possibility, but not something I’m betting on,” Berezin stated.
Labor Market Resilience and Underlying Risks
Recent labor statistics offered a degree of relief, yet they do not fully mitigate the underlying economic risks. The Bureau of Labor Statistics reported a creation of 139,000 new jobs in May, exceeding the forecast of 120,000. Furthermore, the unemployment rate held steady at 4.2%, close to historical lows. While such performance provides some breathing room for sustained economic activity, Berezin views it as insufficient to eliminate the broader recessionary threat.
To support his assessment, Berezin pointed to BCA Research’s internal data, which tracks unemployment trends and a key consumer confidence index. Both indicators, based on BCA’s analysis, have exhibited declines similar to those that have historically preceded past recessions. This reinforces his continued warnings about current structural vulnerabilities.
Berezin has consistently voiced concerns about a potential economic downturn since the initial introduction of tariffs during President Trump’s prior administration. He currently estimates a 75% probability of a recession occurring within the next year. While acknowledging a temporary pause in tariff-related activity, he emphasizes that the fundamental risk has not dissipated.
“Recessions frequently commence when an economy becomes vulnerable and then experiences a shock. When this occurs, reinforcing feedback loops often emerge, intensifying downward pressure on growth. Presently, the United States is teetering on the edge of a cascade of negative economic news.”
Compounding Factors: Debt and Delinquencies
Beyond trade issues, Berezin highlighted additional factors contributing to the economy’s weakening. He specifically noted a troubling rise in delinquencies across credit cards, auto loans, and commercial real estate, signaling a broader deterioration in financial health.
Despite these concerns, recent weeks have seen a slight moderation of certain risks, partly due to advancements in trade negotiations between the United States and China. However, the core structural fundamentals identified by BCA Research remain under close scrutiny.
The critical determinant, according to Berezin, remains the direction of economic and fiscal policy. Should President Trump maintain or intensify tariffs, and if financial markets begin to react negatively to the burgeoning deficit, the likelihood of a recession will once again strengthen. Conversely, a moderation in his policy stance could still allow the United States to avert an economic collapse, at least for the foreseeable future.
David Thompson earned his MBA from the Wharton School and spent five years managing multi-million-dollar portfolios at a leading asset management firm. He now applies that hands-on investment expertise to his writing, offering practical strategies on portfolio diversification, risk management, and long-term wealth building.