Ball State University’s economist warned last year that President Donald Trump’s tariffs on other countries could have an unpredictable effect on the US economy. This year, he says that effect will be much slower growth and fewer jobs.
“So, the economy is underperforming. I think this is going to be a very tough year,” Hicks said. “It’s going to feel and taste just like a formal recession at the very best.”
In his forecast, Ball State economist Michael Hicks notes there were close to 400 differing tariff adjustments in 2025. He says that contributed to increased prices for consumers, and lack of new job creation.
Indiana is seeing the hiring struggles. Hicks says in a good year, around 40,000 jobs are created throughout the state. This year, he predicts no more than 16,000 jobs.
While Hicks says we aren’t in a recession yet, he noted,“I think we could easily bump into a recession this year for one more shock.”
Even if all current tariffs reverted back to their original rates, Hicks says the harm they have already caused to the US economy will be felt for at least another decade. He says agriculture industries, specifically, will suffer more permanent damage.
“The farmers – cotton farmers, rice farmers around the country – have had a permanent competitor develop,” Hicks said. “China has invested in Brazil and they’re now doing just as well. They’re just as productive as we are. And so, I don’t think those markets are becoming back.”
Hicks anticipates further policy volatility as the Supreme Court reviews the legality of Donald Trump’s implementation of the tariffs under the Emergency Economic Powers Act.
Hicks also notes the US has the highest tariff rates since the tariffs blamed for helping to start the Great Depression in 1929.
