Trump's 2nd-Term Tariffs Hit U.S. Economy at a Fragile Moment
With new tariffs on Canada, Mexico, and China, the U.S. economy faces rising layoffs, slowing growth, and declining consumer confidence. Experts warn these trade policies could deepen economic challenges.
President Trump is set to speak before Congress tonight, and the economy will be a major focus. His speech comes as he pushes forward with a big move—raising tariffs on key trade partners. The plan includes a 25% tariff on Canada and Mexico, plus an extra 10% tariff on China.
The stock market reacted badly ahead of these changes, with major losses on Monday. And while Trump is only a few weeks into his second term, his economic policies are already arriving at a shaky time for the U.S. economy.
Recent economic forecasts have taken a hit. The Atlanta Federal Reserve now predicts the economy will shrink by 2.8% in the first quarter. At the same time, layoffs are rising, which is concerning after years of steady job growth.
Even more worrying, American consumers—who drive much of the economy—are cutting back on spending. Last month saw the biggest drop in consumer spending in nearly four years, a sign that people are feeling uncertain about their finances.
The new tariffs are already creating problems for businesses, especially manufacturers, who are seeing costs go up and production slow down. Some experts say the impact of these tariffs on Canada and Mexico alone could be bigger than anything seen in Trump’s first term. On top of that, additional trade measures against China and the European Union could add to the strain.
Federal Reserve Chair Jerome Powell has warned about the dangers of inflation becoming a long-term issue, and recent data suggests that fear is becoming real. People are increasingly pessimistic about the economy, and inflation expectations for the coming year are rising.
During Trump’s first term, the economy was in better shape to handle trade tensions. Stocks were climbing, and corporate tax cuts helped soften the impact of tariffs. But this time around, the economy is more vulnerable, raising big questions about how these new policies will play out.
Also Read: U.S. Tariffs on China—Bessent Pressures Canada & Mexico to Follow Suit
