The US economy is facing uncertainty due to President Donald Trump’s tariff threats and mass layoffs of government workers. Economists say these actions are having a “chilling” effect on businesses, causing them to hold back on investments and plan for uncertain cost structures.
Tariffs on Canada and Mexico, set to take place on March 4, could lead to higher prices at grocery stores and gas pumps. The impact would also be felt in the automotive industry, with car parts potentially increasing by several thousand dollars. Economists warn that this uncertainty is already affecting consumer sentiment, with a recent survey showing a decline in confidence about future business conditions.
The situation is further complicated by the Department of Government Efficiency’s decision to slash the federal workforce. This has led to concerns about job security and may cause consumers to save more money, potentially reducing spending. The latest Conference Board consumer sentiment survey found that this uncertainty has taken a toll on the economy, with inflation expectations surging to 6% and pessimism about future employment prospects reaching a 10-month high.
Economist Rachel Ziemba notes that the impact of tariffs would be felt far beyond just Canada and Mexico, affecting industries such as housing construction. She warns that this uncertainty is having a significant impact on investment decisions and business planning, making it difficult for companies to navigate an uncertain cost structure.
Source: https://abcnews.go.com/Politics/economists-trump-tariff-threats-doge-job-cuts-chilling/story?id=119272571