Under President Donald Trump’s administration, despite low unemployment and gross domestic product growth, increasing tariffs have made the economy flux. So why are many Americans, including St. Thomas students, worried about an economic recession in 2025?
Tyler Schipper, an associate professor of economics and data science at the University of St. Thomas, said the looming threat of a recession could impact college students.
Trump’s “Liberation Day” launched a variety of economic tariffs on April 2, which are taxes on imports brought from other countries. The administration created these tariffs in hopes of lessening U.S. reliance on foreign products and using them as a tool to compete with foreign trade competition, according to The White House website.
Schipper said some of the factors pushing the U.S. toward a recession include Trump’s high tariffs, which he said continue to cause consumer concern.
“As soon as people are grumpy about what they think is going to happen, they’re worried about their jobs, they start not buying stuff, they hold off on big expenses,” Schipper said. “That manifests itself in a real slowdown in the economy … I think if I were to look at one worrisome thing right now, (it would be) the tariffs, but it’s the effect that it’s having on consumers that I think is the most problematic.”
Schipper said that a direct effect of the tariffs is that firms are cutting back on how much they invest in building factories on both U.S. and foreign soil. This limits available jobs and slows production rates.
Additionally, many companies are canceling orders from China due to the 145% import tax. This results in less production and less purchasing by consumers, slowing the economy significantly and provoking public unease.
Although Schipper said the chances of a recession are “50/50,” the effects of one could be wide-reaching. He said that most of his concerns for students during a recession involve the shrinking job market and decreased internship opportunities, which could affect students well into their futures.
“If you’re not finding a job and contributing to your retirement right away, or maybe you have to take a job that’s paying below what you think you should be getting, it makes that process of saving for retirement … harder,” Schipper said.
Sophomore Nathan Baszuro, a business economics major and marketing director of the St. Thomas Economics Club, said that he has experienced the direct effects of shifting investments and uncertain industry changes.
“There seems to be no consistency with what’s going on. I have stocks invested and have seen that volatility lately,” Baszuro said. “I applied for an internship, and I was really excited … unfortunately, the role got taken away because of the tariffs. It was an auto dealership group … It’s really upended what they’re supposed to be doing in their systems.”
Some consumers were optimistic at the beginning of the Trump administration, hoping for deregulation and tax cuts. However, over the last three months, consumer feelings about the economy have been “plummeting,” Schipper said.
“I do my own research and just look for answers about why. Why is the administration doing this? And from what I’ve learned, it doesn’t make much sense, which is why a lot of people are very cautious because these policies are going to hurt businesses and consumers … I’m upset,” Baszuro said.
Schipper said he assures students that despite possible challenges, there are many things they can do to prepare themselves financially. Maintaining well-balanced personal finances, such as by paying bills on time and having a good credit score, is one part of the solution. The second involves developing professional experience.
“There are still opportunities out there, but you might have to work harder for them. And so make sure you’re polishing that resume and networking as much as possible,” Schipper said. “It always stinks to have somebody that has a job tell you you have to work harder to find your job, but that’s the reality of what it looks like in a recession.”
Much of the economic stress remains at a pause due to a 90-day suspension on reciprocal tariffs that range from 10% to 20% on most imports. Other tariffs on imports from major U.S. trading partners, such as Mexico and Canada, are also paused at 25%. Much of the stock market also remains volatile, with new increases and decreases each day.
With the uncertainty of the economic situation, Schipper said some students, especially recent graduates, may feel discouraged. But his ultimate advice is simple:
“Recognizing that there are going to be things that happen in the macroeconomy that are outside your control, and you just have to do your best to overcome,” Schipper said.
Grace Woelfel can be reached at woel8456@stthomas.edu.
