From grocery bills to gas prices and the cost of new cars, Americans are feeling the ripple effects of an increasingly uncertain global economy. According to Georgia Tech experts, while headlines often focus on trade wars or interest rates, the underlying forces at play — and their long-term consequences — are more complex.

Recession Risks and the Current Economic Climate

Alex Hsu, a finance professor in the Scheller College of Business, suggests we may already be in a mild recession, even if it’s not yet officially declared. 

“Recession declarations are always made after the fact,” he explains. “A real-time clue? Look at crude oil prices — they’re down 15% this year, often signaling slowing economic activity.” That’s similar to the trend seen in the early months of the 2008 recession, when oil prices dropped sharply as demand weakened. Despite this, the labor market remains strong in certain sectors, creating a mixed economic picture that’s tough to navigate. 

“If you’re trying to get a sense of where the economy is going,” Hsu adds, “watch weekly jobless claims and energy prices — those are among the most timely indicators available.”

How Tariffs Are (and Aren’t) Affecting Prices

Tibor Besedeš, a professor in the School of Economics, likens tariffs to sales taxes — costs added at the border that can eventually be passed to consumers. 

“If a $20,000 imported car is hit with a 25% tariff, someone’s paying that $5,000,” he says. Besedeš warns that most tariffs imposed since early 2025 affect nearly all imported goods — cars, electronics, toys, and clothing. He cites past studies showing tariffs on Chinese goods were largely paid by U.S. consumers, and this time may be no different. “China has told its firms not to lower prices. So, we should expect prices here to rise.”

However, the recent agreement that began on May 14 between the U.S. and China on a new trade deal has offered a moment of relief. As part of the agreement, both countries will temporarily ease tariffs announced in April for 90 days, with China suspending its planned 34% tariff on U.S. goods, while maintaining a 10% tariff during the pause. Similarly, the United States will suspend its 34% reciprocal tariff while keeping a 10% tariff in place.

“It’s a welcome sign that hopefully trade tensions are subsiding and that after 90 days there will be a more permanent deal whereby the tariffs at least do not increase from these reduced levels,” Besedeš says. “It’s difficult to say anything more concrete but, overall, I take this as a positive sign that we may be stepping back from the brink of an all-out trade war and empty shelves in stores.”

Yet even with signs of progress, uncertainty lingers. Hsu, while cautiously optimistic, adds that “The 90-day pause only prolongs the trade instability. Although it is a good sign that the administration seems willing to negotiate, businesses are still in a holding pattern until a more definitive resolution is reached.”

The Bigger Picture: Global Alliances and Economic Protectionism

As countries reorient their trade relations in response to shifting U.S. policies, Besedeš warns that the long-term consequences could leave the U.S. isolated on the global stage. 

“Countries are starting to look for alternative trading partners," he says. “If the U.S. is not careful, it could lose its influence in global trade, leading to slower economic growth.” He suggests that the growing shift toward regional trade blocs and alternative alliances — such as the EU-China partnership — could erode U.S. competitiveness. 

Hsu concurs, noting that global economic shifts, coupled with increasing tariffs, could exacerbate the risks of a financial crisis. “Pay attention to the credit market,” he advises. “When liquidity dries up, it can cause the financial system to freeze, leading to contagion.” He notes that the Federal Reserve is closely monitoring these risks and still has a range of policy tools at its disposal to help stabilize the system in the event of a crisis.

The Road Ahead

As Americans navigate rising prices and economic uncertainty, these experts suggest focusing on fundamentals — energy prices, jobless claims, and the broader flow of trade and investment. Whether tariffs prove to be a temporary disruption or a lasting shift in global commerce, the trade policies of today are shaping the economic realities of tomorrow. And while the recent U.S.-China agreement marks a hopeful step, the full extent of its impact on consumers, businesses, and global relationships remains to be seen.