A Rocky 100 Days: The Economic Slump Following President Trump's Tariffs
The Remarkable Slump
Economic contraction in the U.S. amidst concerns over Trump's tariffs causing a recession.
As President Trump steps into his 100th day in office, the American economy paint a grim picture. GDP is contracting, the stock market is reeling, and consumer confidence has plummeted to levels last seen during the initial stages of the COVID-19 pandemic. Far from the promised "golden age," Trump's economic policies have instead led the economy into a downward spiral.
Commerce Department's Report
On Wednesday, the Department of Commerce unveiled reports revealing that the United States GDP contracted at a 0.3 percent annual rate in the first quarter of 2025 [1][2][3]. This decline occurred despite a robust growth of 2.4% in the final months of 2024. The quarterly report covers the tumultuous transition from the Biden administration to Trump's term, with the initial waves of the president's trade wars causing ripples within the economy.
Growth was dampened in part by an influx of imports, as businesses and consumers raced to stock up before the tariffs hit in early April [1][2][3]. As imports are a net negative for GDP, this rush to stockpile goods proved detrimental to the nation's economy. The government spending was also lackluster.
The Unsettled American Consumer
Personal spending, a significant economic driver, slowed during the same period, showing growth at just 1.8% [1][3]. This figure represents a significant slowdown from the strong growth in the last quarter of 2024. Mark Zandi, Moody's Analytics' chief economist, observed that consumer spending remains a driving force but with noticeably less enthusiasm than before.
The Index of Consumer Confidence, run by the Conference Board, has dipped for five consecutive months [1][3]. Tariffs are now caught up with inflation as the top concern for households. Many Americans fear the tariffs will boost prices and possibly lead the economy into a recession [1]. The forward-looking elements of the index indicate a troubling situation, with the recession-warning level already breached.
Zandi commented that "recession is about losing faith." Consumers, anxious about their employment prospects, will cut back on spending, potentially leading to a recession. Despite the fitness of the job market, with an unemployment rate of 4.2% in March [1], the Conference Board's survey shows grim expectations about the labor market, resembling the dismal sentiments of 2009's economic downturn.
Sagging Stock Market
Trump's presidency has not fared well on the stock market. As of Tuesday, the S&P 500 index had dropped by 7.3% since the inauguration day, while the tech-heavy Nasdaq experienced a sharper decline of 11% [1]. This marks the worst start to a new presidency since the 1970s. Plummeting consumer confidence, fueled by uncertainty over tariffs, has been a significant contributing factor to these disappointing numbers.
Struggling Businesses
Trump's tariffs have left businesses in a tentative state, uncertain about what the future holds [1][3]. Companies like Curt Carpenter's furniture and lighting store in Boston face a challenging situation, as most of their lighting fixtures are imported from China. Carpenter acknowledges that the tariffs are worse for his business than the 2008 housing crisis.
Yet, not all businesses view the tariffs negatively. Firms like Tom Barr's Michigan-based mold making company have found a lifeline in the form of tariffs. Although these tariffs, which include 10% taxes on nearly everything the US imports and 145% on many goods from China, have raised costs, Barr sees opportunities for growth [1][3]. He believes that the tariffs could spur the domestic industry, providing a boost to local businesses. Barr, however, suggests that the tariffs could be more strategically implemented to avoid unnecessary damages to the broader economy.
References:
[1] NPR. (2025). Impact of President Trump's Tariffs on U.S. GDP, Consumer Confidence, and Business in Q1 2025. [online] Available at: https://www.npr.org/
[2] The Washington Post. (2025). Economy. [online] Available at: https://www.washingtonpost.com/
[3] The New York Times. (2025). Business. [online] Available at: https://www.nytimes.com/
Copyright 2025 NPR.
- The American government is grappling with a contracting GDP, a reeling stock market, and plummeting consumer confidence nearly three months into President Trump's term, according to reports from the Department of Commerce.
- The White House, however, is not the only entity facing challenges; the prolonged political uncertainty surrounding Trump's tariffs has created a hemorrhaging economy, as shown by the Commerce Department's report unveiled on Wednesday.
- In 2024, the market saw a resurgence with a growth of 2.4%, but this momentum was dampened in the first quarter of 2025 as businesses and consumers rushed to stockpile goods before the tariffs took effect.
- Despite a stable job market, consumer confidence has dipped for five consecutive months, with tariffs now leading inflation as the top concern for households. This has resulted in a slowdown of personal spending, which has become a driving force but with noticeably less enthusiasm.
- The struggling stock market has reflected this economic downturn, with the S&P 500 index dropping by 7.3% since President Trump's inauguration day, marking the worst start to a new presidency since the 1970s.
