Follow the latest news about the Trump administration.
Since taking office, President Trump and his advisers have explained the president's positive economic approach to tariffs with a series of contradictory ideas. Other countries are “depriving” the United States and need to stop. The United States is in a drug war with Canada, Mexico and China. The tariffs will help pay back the nation's $36 trillion debt burden.
The news is coming to grocery stores because of signs of pressure on the U.S. economy on Trump’s huge tariffs on Canada, Mexico and China and his preparatory signs of pressure on April 2 when he imposes “reciprocity” tariffs on imports around the world.
Tariffs have sowed uncertainty and weakened commercial investment and consumer sentiment, while sending whirlpools to the market every day. As policymakers wait to accurately measure the measures Mr. Trump follows and how they affect the economy, they are also likely to prevent the Fed from lowering interest rates.
But it seems that Mr. Trump and his advisers are not trying to provide more coherence for their economic strategy, but are accepting the uncertainty he has as a feature rather than a loophole.
“Absolutely, there will be some uncertainty from now until April 2,” White House National Economic Commission director Kevin Hassett said on CNBC this week.
When asked whether he would give the business community a clearer approach to his overall approach, Mr. Trump largely dismissed concerns about the need for predictability for the company.
“No, I think they say that,” he told Maria Bartiromo, host of Fox News' Sunday Morning Futures this month. “You know, it sounds good. But for years, globalists, big globalists have been taking America away. They have been taking money from America. And, all we do is get some of that back up. We will treat our country fairly.”
Mr. Trump also refused to rule out the recession, a result that economists and analysts warn that it may become more likely to become possible in such uncertainty.
Uncertainty caught the attention of the Fed, which remained stable on Wednesday, expected higher inflation and slower U.S. economic growth.
“The uncertainty is very high,” said Fed Chairman Jerome H. Powell.
Rating company Fitch warned this week that Mr. Trump began a global trade war that would reduce global growth and slow U.S. output while raising prices and delaying lower interest rates by the Federal Reserve.
“Tariffs will lead to higher consumer prices in the U.S., lower real wages and raise costs for companies, and the growth in policy uncertainty will cause losses to commercial investment,” said Brian Coulton, chief economist at Fitch.
The surge in uncertainty is largely attributed to the fact that Mr. Trump sees tariffs as a negotiating tool to address policy issues in all varieties, rather than a trade distortion. As part of this approach, his goal is to maintain unpredictable capabilities to maximize his negotiation leverage.
“To date, the lack of strategic coherence and effective orchestration of the Trump 2.0 rollout has no help,” Navin Girishankar, chairman of the Economic Security and Technology Department of the Center for Strategic and International Studies, wrote in an analysis this week. “The resulting policy volatility has flowed to the financial markets and, in some ways, to real economies and communities across the country.”
Henrietta Treyz, director of economic policy at investment firm Veda Partners, said lawmakers still hope that tariffs are a shocking negotiation strategy, and that markets will calm down when there is ultimately “certainty” for them. However, investors are still great.
“There is an emerging view on Building Hill, and once we pass January 1, there will be certainty and the market will calm down,” Ms. Trez said. “This view is not something that most investors believe is the driver of recent volatility, but they also place emphasis on economic consequences.”
Although Mr. Trump showed willingness to delay or reduce tariffs as part of his negotiation strategy, it is not clear that market reactions influenced his decision during his second term. In stark contrast to his first term, Mr. Trump’s top economic aide doesn’t seem to be inclined to reduce his intuition.
Commerce Secretary Howard Lutnick is asking if Mr. Trump’s tariffs this month are worth it, “These policies are the most important things the U.S. has ever seen.” “It’s worth it.”
Treasury Secretary Scott Bessent refused to rule out the possibility of a recession this week, saying in an interview Tuesday that he was optimistic that some imminent tariffs could be cut if other countries lower their trade barriers. However, he did not shy away from the idea that protectionism is a good policy.
“President Trump has identified several key industries, namely, we are staying away from our key industries,” Mr. Bessent said on the Fox Business Network. “He wants to bring manufacturing back to the United States and we are adding these tariffs.”
The continuous drama does seem to be causing huge losses to the U.S. economy, preventing corporate trading activity and slowing down certain types of business investments.
Lawrence H. Summers, who served as Treasury Secretary under President Bill Clinton, said they were already causing losses even if Mr. Trump eventually cuts his tariffs.
“Even if it turns around, these steps are such profound steps,” Mr. Summers said. “They create great uncertainty that puts the economy on the sagging.”
