Trump's tariffs are depressing the US economy: companies are sounding the alarm!

Trump's tariffs are depressing the US economy: companies are sounding the alarm!

President Donald Trump's controversial economic policies, particularly his tariffs, are putting the US economy under increasing pressure. Companies complain about rising costs, delivery bottlenecks and falling demand. One electronics manufacturer even describes the current situation as “business madness”. Among the unpredictable tariff decisions Trump has made against Asian and European imports are doubling tariffs on steel and aluminum imports to 50%, which has a noticeable impact on the construction industry and household goods prices dierating.de.

The Federal Reserve's Beige Book, which outlines economic conditions, mentions tariffs 80 times and uncertainty 76 times, reflecting the worrying situation. Manufacturers who have to pass on the increased costs directly to customers are particularly affected. A chemical manufacturer has described this as a type of tax that can also be cited. In addition, construction equipment dealers report that they have to sell products without tariffs at a higher price in order to protect their margins.

Uncertain future for the US economy

The economic situation could worsen dramatically. Experts, including analysts at JP Morgan, expect a 60 percent chance of a recession in 2025. Trump's tariff policies are seen as particularly damaging to US industry. Laura von Daniels, trade expert, emphasizes that Trump's goal of strengthening US industry has become a distant prospect. Adam Tooze, a British economic historian, criticizes the damaging effects of Trump's policies on his own economy zdf.de.

The uncertainty also has an impact on the labor market. Many companies have already begun to pause hiring, and in Virginia one company has announced plans to cut 20% of its workforce. There was a buying spree in the spring, especially at car dealerships. However, the recovery, which saw retail sales rise 1.7% in March, slowed sharply in April.

Reactions and international effects

The economic problems in the USA could also affect other countries. Trump's tariffs particularly affect poor countries like Lesotho, whose textile industry is suffering. Europe, on the other hand, is increasingly seen as a stable market, which has led to the EU Commission actively trying to attract US researchers and companies. The Financial Times recently wrote an article encouraging Americans to move to Europe, which could increase competition for the U.S. economy.

There is even speculation about a plan called the “Mar-a-Lago Accord” released by Trump’s economic advisor Stephen Miran. This plan involves shutting down the U.S. economy, devaluing the dollar, and issuing new government bonds with zero percent interest over a 100-year term. The conditions are considered unusual and could be interpreted as blackmail against international partners. Where this journey will end remains uncertain, and doubts about his economic policy are growing within Trump's own ranks.