Experts warn of potential worrying consequence of Trump’s tariff policy: “there is preemptive anxiety”
Donald Trump has touted tariffs as a cure-all to fix things in the US, but uncertainty about their effects have American consumers bracing for the worst.
Candidate Donald Trump and Republican lawmakers used the term ‘Bidenomics’ as a cudgel against then-President Joe Biden to focus voters’ frustration over post-pandemic inflation that was affecting countries around the world. That was despite inflation steadily falling after peaking at a 40-year high and the US economy being the envy of the world. But it worked, and Trump returned to the White House as the 47th US president in January.
Just over 2 months into his second term though, his chaotic governing style and unleashing of Elon Musk’s DOGE cost-cutting agency have consumers and markets in turmoil. On Wednesday, 2 April, Trump is due to unveil a new suite of tariffs for what he is calling ‘Liberation Day’ that are expected to drive up prices to which he says he “could care less.”
Trump’s policies are also the driver of an increasing probability in experts’ forecasts of a slowdown in the US economy that has already been dubbed a ‘Trumpcession’. “The cost of his approach will be felt by everybody,” warned Michael Froman, president of the Council on Foreign Relations.
Trump tariffs cause “preemptive anxiety” among US consumers
Economists and retailers have noticed a trend among US consumers, they’re spending noticeably less. “Consumers are increasingly apprehensive about spending,” senior economist at EY-Parthenon Lydia Boussour told The Washington Post.
“We are seeing clear signs that people are being more careful - they’re reluctant to spend on nonessential expenses,” she added. “They’re worried about inflation and have preemptive anxiety around tariffs.”
The behavior has been seen by economists among American consumers of all income levels, including the wealthiest who drove nearly 50% of the post-pandemic economic boom, which they say could be a “pivotal warning.” After years of steady growth there are now concerns that the economy will slow down.
I’m raising my odds that a recession will begin sometime this year to 40%, up from 15% at the start of the year. Last week’s economic data were disconcerting, including the slide in consumer confidence, punk consumer spending, and persistently high inflation. The intensifying…
— Mark Zandi (@Markzandi) March 30, 2025
Golman Sachs has raised their prediction of a recession from 20% to 35% based on the effect of the US economy of DOGE cuts in federal spending along with tariffs. Mark Zandi, chief economist at Moody’s Analytics, has raised his forecast of a recession from 15% to 40%. “As long as the tariffs and DOGE cuts continue to mount, so too will the odds of recession,” he wrote in a post on social media.
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