President Donald Trump’s impact on the U.S. economy is under scrutiny as fears of a potential recession grow, particularly as tariffs are implemented on Mexico, Canada and China.
Trump was pressed about recession speculation on Sunday and said that he “hates to predict things like that” and said the country is in a transition period.
As concerns about a potential recession grow, Newsweek asked the generative AI tools ChatGPT and Elon Musk’s Grok: “Is Donald Trump causing a recession?” The responses are compared below.
Why It Matters
The U.S. economy is experiencing a turbulent period marked by shifting trade policies. Trump’s approach, which includes tariffs, immigration restrictions and deregulation, has raised concern among some economists and business leaders.
With the stock market reacting to trade uncertainties, the debate continues over whether Trump’s policies are a catalyst for economic downturn or a strategic shift for long-term growth.
Photo-illustration by Newsweek
Trump’s Economic Policies: What To Know
Trump’s latest round of tariffs on key trading partners, including Mexico, Canada and China, has already triggered retaliatory measures. According to The New York Times, Beijing has responded by imposing duties on major U.S. exports such as soybeans, wheat and pork. Additionally, Canada has signaled its intent to push back against the tariffs, heightening economic tensions.
Market indicators also reflect growing concerns. In March, the S&P 500 experienced its worst one-week decline since September. Unemployment was also up in February. The civilian unemployment rate rose slightly from January to February, from 4.0 percent to 4.1 percent. In December 2008, the unemployment rate in the United States was 7.2 percent.
Despite some warning signs, Trump remains steadfast in his approach. In an interview with Fox News, he said: “There is a period of transition, because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing. And there are always periods of—it takes a little time. It takes a little time. But I think it should be great for us. I mean, I think it should be great.”
Newsweek used Grok 3, and ChatGPT 4, two of the latest models of the bots, for the comparison.
How Did ChatGPT Respond?
The AI bot remained neutral in its response to the prompt “Is Donald Trump causing a recession?” It pointed at declining stock markets tied to Trump’s tariffs and looked at potential tax cuts and economic growth.
“Determining whether Donald Trump is causing a recession involves examining several aspects of his economic policies,” the bot said. “There are concerns among some economists that Trump’s policies, such as high tariffs on imports from Mexico, Canada, and China, could lead to a recession. These tariffs have already had a negative impact on the stock markets and could lead to reduced trade, increased prices for consumers, and retaliatory actions from other countries.”
“On the other hand,” it continued, “there are arguments that while Trump’s policies might lead to immediate economic challenges, they may not necessarily cause a full recession.”
The bot then said that while the implementation of tariffs and restrictions on immigration could strain the economy by increasing production costs and causing labor shortages, the effects might be offset by other factors like tax cuts and regulatory reductions that could stimulate economic growth in other areas.
“The potential for a recession is still a topic of debate among experts,” it concluded. “Some predict a downturn as a direct result of Trump’s policies, while others see a less than 50% chance of a recession occurring.”
How Did Grok Respond?
Elon Musk’s AI-powered Grok also answered neutrally. Similar to ChatGPT, the bot also responded with three paragraphs, though it answered in a slightly more relaxed tone.
“I don’t have a crystal ball, but I can break this down logically,” it said. “Recessions are caused by a mix of factors—consumer confidence, investment levels, government policy, global trade dynamics, and often a dash of unexpected chaos.”
Pinning it on just one person, the bot said, “oversimplifies things.” Trump’s policies, like tariffs or tax cuts, are just a small bit of the overall picture.
For example, “tariffs might raise costs and slow trade, but they could also push domestic production—depends on how businesses adapt. Tax cuts might juice spending but could also balloon the deficit, which spooks markets long-term.”
The bot pointed to the technical definition of a recession, typically defined as two consecutive quarters of negative GDP growth, and said that’s not the current trajectory in the U.S.
“The U.S. economy’s been chugging along, with unemployment still relatively low … and consumer spending holding up, though inflation’s been a pain. Some folks worry about Trump’s moves—like mass deportations or trade wars—disrupting labor markets or supply chains, but others argue his deregulation and energy policies could offset that by spurring growth. Both sides have points, but it’s too early to call it.”
The bot wrapped up by indicating that there hasn’t been a “clear trigger,” like a major financial crisis or global shock, that suggests a recession is imminent.
What Happens Next
The trajectory of the U.S. economy under Trump’s policies remains uncertain. If trade tensions escalate, businesses may struggle with increased costs, and consumer spending could decline. Conversely, if Trump’s measures successfully incentivize domestic production and bring stability to inflation rates, economic growth could continue, despite temporary setbacks.
