Consumers are now even more fed up with Trump’s tariff nightmare
Just when we thought consumer confidence couldn’t drop any lower …
The University of Michigan released a consumer sentiment survey Friday, showing that confidence has dropped to the second-lowest reading on record. This follows President Donald Trump’s decision to levy tariffs against multiple nations, despite opposition from economists.
Sentiment declined to 50.8, down from 52.2 measured in April. And Trump’s tariffs were a clear concern for most of the people surveyed.
“Tariffs were spontaneously mentioned by nearly three-quarters of consumers, up from almost 60% in April; uncertainty over trade policy continues to dominate consumers’ thinking about the economy,” survey director Joanne Hsu said in a release.
Both Democrats and Republicans surveyed said that they don’t just expect inflation to increase in the year ahead, but they also foresee inflation rising in the long term, with a “particularly large” jump in negative sentiment among Republicans.
Trump unilaterally imposed massive tariffs on imports from multiple countries, despite the healthy economy he inherited from President Joe Biden, who signed stimulus and infrastructure bills along with bills investing in computer chip production and clean tech.
Trump touted tariffs as a way to stimulate the economy, but it is hurting significantly more than helping as the cost of consumer goods increases.
On Wednesday, Walmart said that Trump’s tariffs have triggered price hikes, which will be felt by millions of families who shop at the nation’s top retailer.
Attempting to prevent even more bad news, Trump has retreated on some of the tariffs he put on China, announcing what amounted to a false “deal” on some goods from the United Kingdom. But the majority of Trump’s tariffs still remain in place, and the effects are being felt by consumers—just like economists said they would.
Former New York Times columnist and Nobel Prize-winning economist Paul Krugman wrote in his Friday newsletter that “the trade war is still very much on.”
Krugman compared Trump’s tariffs—after his recent manipulations—to the Smoot-Hawley Tariff Act of 1930, which is now seen as a factor that contributed to the severity of the Great Depression, the worst economic crisis in U.S. history.
“We may not be looking at the complete economic meltdown that seemed quite possible (and is still a possibility),” Krugman wrote, “but we’re still looking at much higher inflation and an economic slowdown at best — i.e., stagflation.”