President Donald Trump’s tariff threats are sparking historic anxiety among the US public, with consumer confidence plummeting 10.5% in March, according to a University of Michigan survey. The decline is the largest monthly jump since 1993, as consumers’ expectations of annual inflation rose to 3.9%, its highest level in over two years.
The tariffs have triggered stock market selloffs and downgrades to growth estimates by Wall Street economists, with many consumers citing uncertainty around policy and economic factors. Even Trump’s base supporters are turning pessimistic, with sentiment falling 3.2% among Republicans.
The survey found that Americans expect unemployment to spike in the coming year, and that spending will likely follow lower if consumer confidence continues to sour. Bill Adams, chief economist at Comerica Bank, warned that waning confidence could crush economic growth.
Trump has imposed tariffs on steel and aluminum imports, leading to retaliations from Canada and the EU, and plans to impose 200% taxes on European wine, spirits, and other alcoholic beverages. The US president has also placed tariffs on imports from Mexico and China, citing concerns over illegal immigration and trade deficits.
The Federal Reserve may face concerns about inflation expectations rising, which can become self-fulfilling if consumers and businesses expect higher prices. The drop in consumer confidence follows a sharp decline in February and coincides with the S&P 500 stock index’s fall of more than 8% over the past month.
As the US economy faces uncertainty, President Trump’s administration suggests that the tariffs are an economic cure-all to address what it inherited from his predecessor. However, experts warn that waning confidence could have a significant impact on growth.
Source: https://apnews.com/article/trump-economy-consumer-confidence-tariffs-inflation-849d658cbab7992590a5a3bb3449aa52