Trump attempts a shift in economic discourse

Unpredictable Economic Narratives: Trump's Polarizing Economy

It's a cat-and-mouse game with President Donald Trump's economic discourse - he's got two wildly contradictory messages. Anything good gets credited to him, while anything bad is pushed onto Joe Biden.

Take the recent economic slump. As the Commerce Department declared on Wednesday that the U.S. economy had indeed taken a hit during the initial months of this year, Trump started spinning a different yarn. He showcased recent domestic investments and pinned the economic woes on Biden, all while touting the most successful first 100 days of any administration in American history.

Funny thing, the stock market has been on a worrisome journey, with the worst start saw since Gerald Ford. But our fearless leader didn’t seem too bothered, shrugging off the weak economic data with a casual, “This is Biden’s economy, because we took over on Jan. 20. And I think you have to give us a little bit of time to get moving."

However, it's worth noting that the robust growth in the final three months of 2024, conducted under Biden but at the tail end of Trump's tenure, saw the economy "really heating up." Yet, Trump was quick to claim the recent decline as Biden's fault.

So, what's really going on? Well, the contraction may be a consequence of Trump's reckless, here-and-there approach to steep tariffs. These pesky tariffs have rattled financial markets and alarmed consumers and businesses alike. Trump calls them “intelligently used tariffs." Some economists think they’ll lead to a recession.

Now, let's crunch some numbers. The S&P 500 has tumbled more during the first 100 days of a presidential term since 1974, when Ford took over from Nixon amid a recession and skyrocketing inflation. The reported drop in the broader U.S. economy (0.3% annual rate according to the Commerce Department) was the first in a three-year streak.

"This is Biden's economy," Trump asserted, repeatedly.

He went on to applaud a $2 trillion worth of recent investments made by companies that attended the event. He even had the audacity to urge them to manufacture “beautiful" microchips in the United States - tongue in cheek, considering he decried the CHIPS Act (a bipartisan law passed during the Biden administration to uncouple the U.S. from Asian semiconductor reliance) as a "horrible thing" just last month.

Democrat Rep. Hakeem Jeffries, the minority leader, had a different take. He pointed the finger squarely at Trump, stating, "This is not Joe Biden's economy, Donald. It is your economy. It is the Trump economy."

economists like Cris deRitis, deputy chief economist at Moody's Analytics, find it tricky to pinpoint when one president's effects end and the other one’s begin. They do admit, however, that some slowing in the economy was to be expected at the start of the year.

The decline in the economy, according to deRitis, was largely driven by an increase in imports as consumers and retailers rushed to stock up before new tariffs took effect. However, he struggles to see how this was induced by the Biden administration.

The bottom line? Trump's economic policies, particularly the tariffs, are making an impact. They're causing a reduction in long-term GDP and wages, increasing the likelihood of a recession. But they generate massive revenue - about $5.2 trillion over ten years - that could help reduce federal debt. All the while, they're burdening consumers and businesses with higher costs. It's a volatile situation, to say the least.

The contraction in the economy might be a result of President Donald Trump's "intelligently used tariffs," and some economists predict these tariffs could lead to a recession.
During a recent event, President Trump attributed a $2 trillion worth of investments made by companies to his administration, despite previously critiquing the CHIPS Act, a bipartisan law passed under President Biden.
The decline in the economy, as declared by the Commerce Department, was largely driven by an increase in imports, but economists find it challenging to attribute this directly to the Biden administration.
Despite repeatedly asserting that the current economic woes are Biden's fault, some economic indicators demonstrate growth during Biden's tenure, particularly in the final months of 2024.