If the Republican Party wins the US election, the US enters a mild recession. This is ABN AMRO’s conclusion based on new research. “A recession in the US is never good for the rest of the world,” says Roger Quadvlieg, senior US economist at ABN AMRO.

ABN Amro looked at the potential influence of Republican and Democratic victories on the US economy. This shows that a Democrat victory will have little impact on the US economy, and therefore the global economy.

But if Donald Trump wins the US presidential election, America will face a slight setback. That’s because Trump wants to make three decisions that will change American economic policy. “An analysis of the campaign, his interviews and speeches show that Trump wants to introduce a global import tax, a stronger immigration policy and general tax cuts,” Quadvlieg explains.

Increase in inflation

Global import tariffs in particular would have a major impact on the US economy. Trump is proposing a 10 percent global import tariff on all goods, and a 60 percent tariff on various goods. According to Quaedvlieg, this will cause inflation to rise significantly.

In the calculation, ABN AMRO assumes that inflation will rise by 1.7 percent in the first year. The bank expects the US central bank, the Federal Reserve (Fed), to choose to raise interest rates later. ‘A mild recession in the US in 2026 combined with lower demand for products due to higher import tariffs.’

According to Quaedvlieg, this is a negative growth of 0.6 percent in three quarters. ‘This is not like the recession in 2008 or the effects of the corona crisis. But if Trump’s actions aren’t implemented, U.S. GDP will actually fall by 2 percent. And it won’t recover unless import tariffs are lifted,” the economist fears. A mild recession affects the rest of the world as well. Both low demand for goods in the US and high interest rates will affect financial conditions in the rest of the world.

hypothetical scenario

However, it should be noted that this is a hypothetical scenario. To meet this demand, Republicans must become major not only in presidential elections, but also in the Senate and House of Representatives. If that fails, Quaedvlieg expects Trump’s policy to be forced to be somewhat flatter by Democrats. ‘It was one of the most intense scenes.’