Elon Musk has declared US President Donald Trump's tariff policy will cause a recession in the US by the end of the year as the feud between the two continues on social media.
The Tesla CEO has publicly distanced himself from the Trump administration over its economic policies, specifically over the White House's spending bill which Musk is "disappointed" over.
Despite supporting and funding the Republican politician's 2024 Election campaign, Musk has failed to criticise Trump's sweeping tariffs, which are taxes on imports on good and services from other countries coming into the US.
With the President threatening to remove federal funding from Musk's businesses, the X owner took to his social media platform to issue a warning over the trajectory for the US economy.
Musk predicts Trump's tariffs will lead to a recession
GETTY / PA
In response to a post, Musk stated: "The Trump tariffs will cause a recession in the second half of this year."
A recession is defined as happening when a nation's economy experiences two consecutive quarters of negative growth.
In the first quarter of 2025, the United States' gross domestic product (GDP) posted a contraction of 0.2 per cent, signaling Musk's prediction could become a reality.
Trump's focus on tariffs has received widespread criticism from economists and the business community as the tax is widely considered to be inflationary.
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The odds of a recession happening have increased following Trump's tariffs, economists have warnedGETTY Earlier this week, the Organization for Economic Co-operation and Development (OECD) warned the US economy will see its growth hit hard by Trump's protectionist policies.
GDP growth is forecast to slow from 2.8 per cent in 2004 to just 1.6 percent this year, based on the Paris-based economic group's latest projections.
The OECD is cutting its growth forecast for the year down to 2.9 percent compared to 3.3 percent last year.
Furthermore, the organisation warned inflation is likely to rise later in the year before potentially easing in 2025.
In the OEDC's report, the organisation's chief economist Alvaro Pereira said: "Weakened economic prospects will be felt around the world, with almost no exception.
"Lower growth and less trade will hit incomes and slow job growth."
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Former Trump ally Elon Musk is hitting back at the White House
REUTERS"Today's policy uncertainty is weakening trade and investment, diminishing consumer and business confidence and curbing growth prospects,' OECD Secretary General Mathias Cormann added.
"The main headwinds are lower export growth as a result of retaliatory measures from trading partners, the impact of high policy uncertainty, and a marked slowdown in net immigration."
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