American voters signed up en masse for four more years of Donald Trump, but their wallets may never forgive them. The new istration’s chaotic tariff policies are already kicking off a global trade war on multiple fronts, with Canada, Mexico, and China each responding in kind.
You don’t have to be a Harvard economist to realize inflation is going to skyrocket and send the already battered and bruised U.S. economy into a tailspin. Last week, the Atlanta Federal Reserve sounded a dramatic note of caution, projecting that the economy will shrink by 2.8% in Q1 2025, a more negative outlook than their previous (already gloomy) prediction of a 1.5% contraction.
As always, if you want a clear picture of what’s happening beyond partisan party bickering, you look to the markets. Bond traders are already upping their bets on recession coming, with Treasury bond yields falling sharply, and widespread expectations of the Federal Reserve cutting interest rates.
Things are looking so bad that not even Trump himself can deny it. He was asked outright, “are you expecting a recession this year?” on Fox News’ Sunday Morning Futures. After mumbling that he’s only just started the job, he began flailing:
“I hate to predict things like that. There is a period of transition, because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing. And there are always periods of, it takes a little time. It takes a little time, but I think it should be great for us.”
Just that for Trump and his ilk “a little time” of economic misery might mean their stock portfolio decreases by a couple of percentage points, but for regular folk it means everything gets more expensive: you will be eating worse food, paying more for your home, spending less on entertainment, and potentially taking on crippling personal debt to keep your head above water.
To her credit, Fox News interviewer Maria Bartiromo continued to press Trump about the “lack of clarity” on the economy. He casually replied, “the tariffs could go up as time goes by ” to which she pointedly responded, “well, that’s not clarity.”
The Trump istration’s over-arching objective — to use economic incentives to encourage companies to make their products in the U.S., thus creating jobs and boosting the economy — is actually a good idea. Ask anyone in a manufacturing town what happened when local factories closed their doors and the jobs moved overseas, and they’ll report back with a litany of horror stories of widespread unemployment, rising crime, and an epidemic of drug abuse.
However, while the goal might be laudatory, the journey to it (if we ever even get there) will be painful for Americans. The real question is how much people will be prepared to put up with: groceries are already inhumanly expensive, the tariffs are already squeezing regular folks’ pay packets, and Trump’s election vows that things would be better than under Biden are ringing hollow.
A glance back at history indicates that widespread economic discontent often translates into a dramatic and violent response from the people most affected by it, so maybe it’s time to bone up on 18th-century French history. In the meantime, batten down the hatches and prepare for a grim few years, as however this pans out in the long term, the short term will be miserable.
Published: Mar 10, 2025 07:17 am