The risk of a US and global recession this year have risen to 60% from 40% earlier on the heels of President Donald Trump’s sweeping reciprocal tariffs, Wall Street brokerage JPMorgan said.

Trump imposed a 10% baseline tariff on all imports to the US and higher duties on dozens of other countries.

“Disruptive US policies has been recognized as the biggest risk to the global outlook all year,” JPMorgan strategists, led by Bruce Kasman, said in a note on Thursday, adding that US trade policy has turned less business-friendly than anticipated.

“The effect of this tax hike is likely to be magnified through retaliation, a slide in US business sentiment, and supply chain disruptions,” Kasman said.

Other Wall Street brokerages, including Barclays and Deutsche Bank, also warned that the US economy faces a higher risk of slipping into a recession this year if Trump’s new levies remain in place.

However, Kasman expects the shock of the tariffs to be “modestly dampened” by the prospect of further rate cuts in the US.

JPMorgan reiterated its forecast of two 25-basis-point rate reductions by the Federal Reserve in June and September this year, while investors expect a total of four rate cuts in 2025, per data compiled by LSEG.