A trade war initiated by President Donald Trump is expected to have a broad and deep impact on the US economy, potentially leading to fewer jobs, slower growth, and higher prices. The implementation of tariffs on goods from Mexico, Canada, and China could result in a price shock that undermines demand, investment, and hiring. Economists warn that the US economy may be caught between resurgent inflation and a weakening economy, with some analysts predicting a recession by the start of next year. The uncertainty surrounding Trump's actions has unnerved markets, with stock prices and bond yields falling and the S&P 500 index down about 5.5% from its all-time high. The Federal Reserve will play a crucial role in determining the outcome, as it must weigh the risks of higher inflation against the potential hit to growth and rising joblessness.