New York City will likely enter into a mild recession as a result of President Donald Trump’s tariff regime and the resulting chaos in the global economy, according to city Comptroller Brad Lander, who projected that the downturn will cost the city nearly 36,000 jobs by the end of 2025 and depress tax revenue.
Lander, the city’s chief fiscal officer and a candidate for mayor, released an analysis Wednesday echoing widespread consensus among economists: that the taxes on imports will worsen inflation and stifle growth by reducing business and consumer confidence. (Although Trump issued a 90-day “pause” on the most severe global tariffs, the White House raised tariffs on China to 145%, maintained a 10% duty on most countries worldwide and plans to tax other imports such as pharmaceutical drugs and semiconductors.)
“Unfortunately, the likelihood of an economic downturn has grown significantly,” Lander said in a press conference at his Manhattan office.
In the possible recession outlined by the comptroller, the city would lose 35,700 jobs this year, with the hospitality, manufacturing and retail sectors suffering the worst losses compared to 2024. Jobs would rebound next year, assuming tariffs are rolled back by then, with the city regaining about 91,000 jobs in 2026.
The city budget would be strained by a loss in tax revenue stemming from the job losses and stock-market downturn. New York would miss out on about $4 billion in income, sales and real estate transaction taxes between 2026 and 2027 under a mild recession, the study projects.
The comptroller’s report relied on three models by Moody’s Analytics: one in which tariffs disappear by 2026, resulting in no recession; another in which tariffs stay in place into 2026, creating a mild recession; and a third in which tariffs stabilize around 12.7%, down from the current level of 27%, and remain in place until 2027, creating a deeper recession. Lander’s report was based on that middle scenario, which now seems likeliest, he said.
Ironically enough, the city’s economy had been exceeding expectations until Trump took office in January, with tax revenues outpacing what the mayor’s budget office had projected. That means the city has cash on hand to soften the expected blow: Lander on Wednesday urged the mayor and City Council to make a roughly $1 billion deposit into the city’s rainy day fund in the upcoming budget, which it could draw upon to prevent severe service cuts during a recession. (The city currently has $2 billion in the fund.)
Neither the mayor nor the City Council has committed to adding any money to the rainy day fund in the next budget due June 30.
Mayor Adams has given no indication that he is concerned about how New York will be affected by the tariffs, or by anticipated separate federal spending cuts by the White House and Republican-controlled Congress. In a news conference last week, the mayor admitted he did not understand tariffs, but said he was open to the idea.
“Low-income, working-class people are struggling every day,” he said. “And so whatever we were doing, we need to think differently.”
Lander, a frequent rival of the mayor’s, criticized the administration’s silence, pointing to the mayor’s increasing coziness with the Trump administration that coincided with his criminal case being dropped.
“They haven’t said a word about the risks that I speak about today,” he said.
