Trump’s Trade Wars Fuel Economic Uncertainty Amid Recession Fears
Find out what Trump’s trade war will do to the economy and jobs.
Hello Friends!
Have you wondered about tariffs, protectionism, and trade wars and why they influence your stocks and livelihood? Check out my latest article on X below.
You don’t need to be a Wall Street analyst to know something’s off. Now we’re getting confirmation in the numbers: the U.S. economy is slipping. The Atlanta Fed’s GDPNow forecast projects a -2.8% contraction for the first quarter of 2025—a warning sign blinking in red. That’s not just an abstract data point; it’s a real-world signal that businesses are pausing investment, job growth is stalling, and families are feeling the strain.
This sharp economic slide didn’t happen in a vacuum. It followed President Trump’s announcement of sweeping new tariffs, part of an aggressive trade agenda that’s injected a new layer of uncertainty into an already fragile economy. Since early March, when trade rhetoric ramped up, the GDPNow forecast has remained in the red. Adding fuel to the dismal situation, the S&P 500 is down nearly 17% from its recent high, with about $11 trillion in stock market losses since Trump's inauguration. For working Americans, that translates to delayed pay raises, fewer job opportunities, and higher costs for nearly everything. We’re living with the consequences now, and unless we change course, it will get worse.
Now, instead of correcting course with stable, pro-growth policies, President Trump’s sweeping new tariffs—10% minimum tax on all imports, including 54% on Chinese goods and 20% on European products—are the latest attempt to reshape trade policy by brute force. But rather than strengthening our economy, this strategy injects more uncertainty, stokes inflation, and raises prices on everyday goods. Families already stretched by high grocery bills and energy costs are now seeing those same dollars buy even less. If you’re a parent trying to save for your child’s education or a retiree budgeting carefully, these policies make your life harder.
To truly put America first, we must lower spending, make the Trump tax cuts permanent, reduce regulations, and engage our allies in free trade that benefits everyone.
After Trump announced a much more complicated "reciprocal tariff" strategy, markets immediately sounded the alarm. Stocks fell sharply, oil prices dropped, and investors scrambled for safety. Prices for essentials—from electronics to groceries—are expected to surge. One estimate suggests a future iPhone could cost $2,300. Tariffs aren’t a clever negotiating tactic—they’re taxes on Americans. They hit hardest at the gas pump and checkout counter, especially for low-income households living paycheck to paycheck.
For many, this policy may seem like economic patriotism—fixing trade deficits and restoring American jobs. But let’s be clear: this isn’t economic strategy; it’s economic theater. As Milton Friedman said, “We call a tariff a protective measure. It does protect; it protects the consumer very well against one thing. It protects the consumer against low prices.”
Trade isn’t a weapon. It’s a bridge that connects people to more opportunity, innovation, and peace. When we trade freely, costs fall, choices expand, and economies grow. History shows that nations that trade are less likely to fight. A tariff war, by contrast, makes us poorer and isolates us from global partnerships that build stability.
Instead of projecting strength, these tariffs project fear—fear that American businesses can’t compete unless Washington rigs the game. That fear leads to retaliation, not respect. Remember the Smoot-Hawley Tariff Act of 1930? It helped trigger a global trade war and started and exacerbated the Great Depression. We could be heading down a similar road, and this time, families already battling inflation may not have the margin to endure it.
Many believe trade “hollowed out” the Rust Belt. But that story misses the real culprits: automation and innovation, along with federal, state, and local policies and strong labor unions that made it hard to do business. High taxes, strict labor mandates, and bloated bureaucracies drove jobs away—not just overseas, but to states like Texas and Florida with better policies. In fact, manufacturing output has hit record highs in recent decades; the jobs moved—not because of trade, but because of bad policies that made staying put too expensive.
If we want to bring jobs back or offer better ones, we must make America more competitive—not more combative. That starts with making the Tax Cuts and Jobs Act permanent. These tax cuts boosted wages, investment, and growth. Letting them expire would hurt workers and businesses. We must also slash reckless spending. Our national debt is over $36 trillion and growing. Reducing federal spending helps shrink trade deficits, too, by boosting national savings and reducing reliance on foreign capital. Fiscal discipline at home leads to strength abroad.
We also need to cut red tape. Entrepreneurs are burdened by nearly $2 trillion in regulatory costs each year. Cutting that burden means more startups, more jobs, and more innovation. It means unleashing the energy and ambition of the American people.
Instead of punishing Americans and our allies with tariffs, we should lead them in building a more open global economy. Trade deals like the Trans-Pacific Partnership would have enhanced America’s influence in Asia and set higher standards for international commerce. By walking away, we ceded ground to China. It’s time to reverse course. More trade agreements—built on reducing trade barriers—can reinforce our leadership and lift incomes at home and abroad.
To Trump supporters who want more prosperity and fair trade: you’re right to want a better deal for America. But the way to get there is not by taxing ourselves or stoking uncertainty. It’s by bringing our house in order—lowering barriers, not raising them. Let’s compete by unleashing the best of what America offers—not by closing our doors.
Americans deserve policies that unite prosperity with liberty. Tariffs concentrate power in the hands of politicians who pick winners and losers. That’s not capitalism—it’s economic control. True prosperity comes when people are free to trade, innovate, and grow. That’s what makes America exceptional.
Let’s not build walls around our economy. Let’s build bridges that connect us to the world and a more prosperous future for all. Tariffs won’t make America great again. But economic freedom will.
I'm not a fan of the tariffs but for my own sanity I have to think his goal is to lower trade barriers with most of these countries. Is this the best strategy? Probably not. But apparently 50 of them have reached out to offer to drop their tariffs, many to 0, in order to negotiate a better rate with trump. If everyone goes to 0 tariffs that will be by definition deflationary. I also think a big part of this is to drive the 10 year down as low as possible before we have to refinance all the short term paper that yellen created last year. Bessent is no idiot and I can't imagine him allowing himself to be involved with this if he didn't think it made sense.
BUT then I hear idiots like Navarro on the Sunday shows saying publicly they're not looking to negotiate with anyone and talking in circles about factories that will never exist and I start to worry maybe this is the entire plan. The fact that that dude has trumps ear is frightening.
I own a small (but mighty) custom cabinet shop in Austin. I employ 8 people with families. 90% of my material comes from Canada and Vietnam. We're going to have to raise our prices if these stay in place for very long. Anecdotal, sure, but when they talk about Main Street, small us business/manufacturing, skilled tradesman etc I'm quite literally who they're referring to and I'm telling you this is not helpful at all. I'm as maga as they come but a lot of this defies logic.