Economists say that the uncertainty of the tariff threats of President Donald Trump and the mass layoffs of government workers are beginning to have a “chilling” effect on the economy of the United States.
“It is a very difficult business environment, because they cannot plan what their cost structure will be,” said Rachel Ziemba, an attached member of Senior Fellow at the center of a new US security. “It adds to the uncertainty of investment, and some people are braking investments.”
Until now, Trump has imposed 10% tariffs on Chinese imports and says that it will impose an additional 10%, more 25% tariffs in Canada and Mexico on March 4. Trump also says that he will impose “reciprocal tariffs” that coincide with the tasks of other countries in the US. UU. Which extends above the rates, semiconductor, steel and aluminum plans. Even if Trump finally does not advance with all its tariff threats, mere uncertainty has a chilling effect.
“If one of the contributions of its factory increases by 25%, it could reduce its production and say that we may have to fire some people,” Ziemba added.
Elon Musk offers comments during a cabinet meeting held by President Donald Trump in the White House, on February 26, 2025 in Washington.
Andrew Harnik/Getty Images
Meanwhile, the cutting of the Efficiency Department of the Federal Work Force Government throughout the country “also affects consumption, because people are losing their jobs or are afraid to lose their jobs, so they could make more money save,” said Ziemba.
This week, the consumption feeling survey of the Conference Board found that it registered the greatest monthly decrease since August 2021.
“The opinions of the current conditions of the labor market were weakened. Consumers became pessimistic about future and less optimistic commercial conditions on future income. The pessimism about future employment perspectives worsened and reached a maximum of 10 months, ”said Stephanie Guichard, a senior economist of global indicators at the Conference Board.
“Average 12 -month inflation expectations increased from 5.2% to 6% in February. This increase probably reflected a combination of factors, including sticky inflation, but also the recent leap in the prices of key basic products such as eggs and the expected impact of tariffs, “Guichard said.
The Tariffs of Canada and Mexico would have a radical effect, since those are the two largest commercial partners in the United States. It could increase prices in the groceries and gas pump. Ziemba also pointed out that the cost of cars could increase by several thousand dollars.
“Every time a part of the car crosses the border, 25% of tariffs could be very burdensome,” Ziemba said. “We could see that the cost of building a house rises quite substantially.”
