New York City's economy is bracing for a potential downturn, with city Comptroller Brad Lander warning of job losses and reduced tax revenue due to President Donald Trump's tariff regime. Lander's analysis, as reported by Gothamist, anticipates a "mild recession" that could result in the loss of 71,200 jobs from the city's peak employment levels, with hospitality, manufacturing, and retail sectors forecasted to take the hardest hits.
Despite the challenges, the city is set to try and mitigate the fallout, with Lander suggesting a bolstering of the city's rainy-day fund. He believes this could provide a cushion against the projected $4.3 billion loss in revenues over the next two fiscal years. However, the Adams administration has not yet taken any concrete steps to address these concerns. The tariffs, which were defended by the Trump administration for the intention to protect America's national security, seem now to likely induce a recession that could ripple beyond New York's borders as per Lander's press conference statements obtained by Crain's New York.
Under one scenario explored by the comptroller's office, the tariffs could remain until 2026, leading to a 1% GDP decline by the end of 2025, and a 20% drop in the S&P 500 from its late 2024 benchmark. The city already saw early signs of a downturn in tourism, with key international visitor groups issuing travel advisories and reducing bookings. On a brighter note, assuming tariffs are lifted by 2026, the report hints at a rebound with around 91,000 jobs potentially being regained.
Mayor Eric Adams, despite previously admitting a lack of understanding of tariffs, has expressed a willingness to engage with the topic, but so far, no clear strategy has been put forward to protect New York City's economy. Lander has urged the mayor and City Council to take action, calling for a $1 billion deposit into the city's rainy day fund, a move to potentially stave off severe service cuts during the forecasted economic downturn. According to Crain's New York, "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."
In light of these developments, city officials, including Council Speaker Adrienne Adams, have appealed to New York's Republican congressional delegation to intervene against the detrimental impact of the tariffs. Such efforts highlight the growing urgency to mitigate what is projected as the largest tax increase on Americans since 1968, both to safeguard jobs and prevent a spike in everyday consumer prices.
