US President Donald Trump’s trade policies are having a ripple effect on the economy, with companies increasing prices and cutting staff as consumers pull back spending. Retail sales declined in May, with vehicle and building material purchases showing a sharp drop, which may be linked to an earlier surge of spending on big-ticket items before tariffs took effect.
Several major companies have noted a shift in their businesses, citing inflation and tariffs as key concerns. JetBlue is reducing flight schedules, reorganizing its leadership team, and pausing cabin refurbishments due to weaker demand for travel. Procter & Gamble plans to cut 7,000 jobs and raise prices to mitigate the effects of tariffs, estimated at $600 million.
Walmart’s consumer confidence has deteriorated due to “looming tariffs” and “immigration noise,” with the company warning that it would soon be forced to raise prices. However, Mr. Trump called on Walmart to absorb the costs instead, sparking criticism. Lululemon and Mattel also announced job cuts in response to tariffs on imports from China.
These companies’ responses reflect the growing concern among Americans about inflation and tariffs, with a recent survey by McKinsey finding that these issues were the biggest sources of worry for respondents. As officials at the Federal Reserve monitor the economy’s reaction to Mr. Trump’s trade war, these developments highlight the potential economic consequences of his policies.
Source: https://www.nytimes.com/2025/06/18/business/fed-tariffs-inflation-companies.html