You can see the Trump recession from here | Opinion
If Donald Trump’s main goal for the first 100 days of his administration was to engineer a recession, it is hard to imagine that he’d have done things any differently.
He has jacked up economic uncertainty with a chaos Cabinet, opaque policymaking that can swing wildly from day to day, and the mass firing mayhem of DOGE that is impacting every industry from agriculture to tourism. The messy results make investment and hiring decisions fraught for businesses, from the tiny — like a corner bodega or auto repair shop — to the globe-shaping and giant — like new auto factories or designers of new AI chips.
Trump has undermined faith in the dollar with attacks on the Federal Reserve’s independence and demand for its compliance in potentially inflationary rate cuts. His reckless budget threatens American financial stability, which already was left in bad shape by the Biden administration. The result: The American dollar is losing value and interest rates threaten to climb even as the economy weakens.
Trump also has thrown global trade into turmoil with skyrocketing tariffs followed by erratic partial reversals and Hail Mary plans for negotiation. He’s launched a full-scale trade war with China, the world’s second most important economy and a global driver of economic growth. He’s made trade with the rest of the world, even our closest neighbors, much harder by pushing executives to turn their attention from expansion plans to desperate efforts to keep their supply chains intact.
As a result, he has tanked the stock market, which has its own effects. As Americans reflect on their 401(k)s and other investments, they become less likely to spend based on a feeling of financial security. The weakening dollar and inflationary pressures from trade disruptions threaten to raise interest rates with implications for the cost of home and auto loans and carrying a balance on a credit card.
Small business optimism fell for the third month in a row according to the National Federation of Independent Business. Consumer inflation expectations are up for the second month in a row, according to the St. Louis Federal Reserve Bank. Expectations of rising unemployment are up to the highest levels in five years, as well, according to the New York Federal Reserve Bank. Wall Street players and economists are sounding the alarm bells on a downturn.
All those data points are from just the last two weeks. I expect more bad news in the coming weeks as the cratering stock market has its effect and cautious business decisions start to appear in economic data. So far this year, the dollar and S&P have lost about 8% of their value.
When Trump ran for office, he told a story of economic growth — of factories returning to America, of tax cuts, deregulation, slowing inflation and big-time business deals. His efforts along those lines have come in a flurry of executive orders and a trickle of big-name deals the White House claims are worth $3 trillion, but with an actual impact somewhere off in the future. So far Congress has done little to cement Trump’s pro-growth plans into law.
On Wednesday, he started to back away from some of the most damaging rhetorical gambits and policy rollouts. That’s prompted the dollar and the stock market to regain some lost territory, but there are two problems with putting much faith in Trumpian repentance for disastrous economic policy.
First, Trump’s views on the economy depend on which of his advisers got to him most recently, who is on the outs in the White House and what he saw last night on Fox News. That’s not a recipe for a consistent approach. Also, his reversal only fuels the chaos narrative that is such a drag on investment plans and consumer optimism.
I am glad to know that Trump doesn’t plan to fire Federal Reserve Chairman Jerome Powell. Such a move could be the final straw for the U.S. economy. But that doesn’t change the fact that Trump has assembled the worst collection of ill-considered economic plans of any president since Richard Nixon birthed stagflation in the 1970s.
I don’t think things are that bad, at least not yet, but in the months to come, we’re all going to pay the price in an increasingly likely recession, for which Trump will be solely to blame.
This story was originally published April 24, 2025 at 5:08 AM with the headline "You can see the Trump recession from here | Opinion."
