Musk predicts Trump's tariffs will cause recession amid growing spat with president
Former presidential adviser and confidante Elon Musk escalated his growing feud with President Trump by saying the president's tariffs would result in a recession later this year.
'The Trump Tariffs will cause a recession in the second half of this year,' he wrote on his social media website, X.
The remark is the latest dig at Trump's policies since the tech billionaire left his role in the administration last week as head of the government cost-cutting panel known as the Department of Government Efficiency, or DOGE.
Musk blasted Republicans' tax-and-spending-cut bill this week, which Trump helped to shepherd through the House last month, calling it a 'disgusting abomination.'
'I'm sorry, but I just can't stand it anymore,' Musk wrote on X on Tuesday. 'This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination. Shame on those who voted for it: you know you did wrong. You know it.'
Beyond the president's policies, Musk also attacked Trump personally, claiming Thursday that Trump is mentioned in files pertaining to Jeffrey Epstein, the convicted child abuser who died in jail in 2019.
'Time to drop the really big bomb: [Donald Trump] is in the Epstein files. That is the real reason they have not been made public. Have a nice day, DJT!' he wrote on X.
Musk's efforts with DOGE during his time in the Trump administration stirred a flurry of controversy and led to resignations of top officials in multiple agencies, including the IRS and the Treasury Department.
Concerns about his team's access to private data have resulted in lawsuits.
'DOGE's mission to advise OMB and the White House on how to slash regulations and cut expenditures puts at risk important consumer safeguards and public protections,' Robert Weissman, co-president of Public Citizen, an advocacy group that brought a lawsuit against the administration, said in a January statement.
Controversies have also been swirling about Musk's personal life.
A recent New York Times investigation found that Musk was 'juggling … a drug habit far more serious than previously known.'
Musk's criticism is channeling concerns among economists and business leaders about the prospect of a recession resulting from tariffs.
Trump's tariffs — notably his 'reciprocal,' country-specific tariffs and triple-digit tariffs on China — have been walked back, but a highly elevated overall U.S. tariff rate relative to recent decades has remained in place.
The overall tariff rate is somewhere between 10 and 15 percent now, according to various estimates, and Trump's tariffs are expected to pull in about $2.5 trillion in federal revenues.
The Federal Reserve has repeatedly painted a stagflationary picture of the economic outlook in recent months. The Congressional Budget Office (CBO) factored a boosted inflationary prediction of 0.4 percentage points as a result of the tariffs into its budgetary calculations this week.
However, a recession is far from guaranteed, and many predictions about the economy have grown more positive as trade negotiations have continued.
The U.S. trade deficit narrowed by a record amount in April following intense front-running of tariffs by importers in the first quarter, causing a collective sigh of relief from many investors.
'The drop in imports should have a positive impact on GDP, quelling any fears of a recession in the near term,' Damian McIntyre, vice president at investment firm Federated Hermes, commented Thursday.
Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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