President Donald Trump appears to be walking back some of his more extreme positioning on the economy — pivoting yet again on his signature tariff agenda and renewing concerns that his haphazard approach has already done serious economic damage. On Tuesday, Trump softened on two key issues that had been giving Wall Street nightmares: He signaled openness to easing tariffs on China, and said he has “no intention” of firing Federal Reserve Chair Jerome Powell. But the abrupt shift in tone was yet another reminder of the turbulence emanating from the White House that could push the US, and potentially other economies, into a recession. More damaging than the tariffs themselves is the uncertainty the White House has created, said Wendy Edelberg, senior fellow in Economic Studies at the Brookings Institution, in an interview with CNN. “And the lurching hasn’t ended. In fact, this is simply another lurch.” After an abysmal few weeks, US stocks surged Tuesday and Wednesday — a sign of Wall Street’s relief that the president appears to be heeding warnings from CEOs and close advisers who say his 145% tariffs on China aren’t sustainable. In an Oval Office gaggle with reporters, Trump also refrained from attacking Powell. But US stocks remain down 11% since Trump took office in January, battered by near-constant changes and mixed messaging from the White House about a tariff agenda that would fundamentally alter global trade and slam the brakes on economic growth. Despite the recent rebound, more than $7 trillion in value has been erased from the S&P 500 since record highs were set just two months ago, according to FactSet data. At this point, any sign that Trump is pulling back on tariffs or respecting decades of precedent protecting the Fed’s independence will land, at least temporarily, as a win for Wall Street. “Markets are terrified about the dumb things he’s going to do, and when he doesn’t do them, they’re thrilled,” Justin Wolfers, professor of economics and public policy at the University of Michigan, told CNN. But Wolfers and other economists expressed concern about the damage that’s already been done. “It’s clear the economy will slow,” he said. “The question is how much.” Forecasters broadly say there is an elevated risk of a recession this year — perhaps as high as a 50% to 70% chance. Virtually all note those odds are in flux because of Trump’s ever-shifting tariff agenda. Even if all of the Trump 2.0 tariffs were unwound today, the US would still lose at least 1% of GDP just from the policy uncertainty, said Kent Smetters, professor of business economics and public policy at the University of Pennsylvania’s Wharton School. “We are projecting that GDP will eventually fall by 5% if all the tariffs are implemented.” But to be clear: The Trump administration has not had any public discussion about unwinding other tariffs, which alone are extraordinarily aggressive. Tariffs on China may come down, but “they won’t be zero,” according to Trump. Remaining in place are 10% universal tariffs and 25% tariffs on autos, steel, aluminum and some Mexican and Canadian products. According to a senior White House official who spoke to the Wall Street Journal, the current 145% tariffs on China could come down to “between roughly 50% and 65%.” That would still be hugely disruptive. Trump’s tariff headaches come with more than financial costs. Business leaders have been paralyzed by lack of clarity, as have some of America’s closest allies and trading partners around the globe. “The US administration’s on-off tariff policy has led to a confidence crisis,” Gregory Daco, EY’s chief economist, said in a report on Wednesday. It will take time to restore that lost confidence, especially given that US tariffs can be dialed up or down at any hour and often with little to no notice. “Businesses don’t know which end is up,” Edelberg said, noting one Fed study that found 75% of businesses said they aren’t increasing their capital expenditures over the next six months. “Everyone is holding their breath because they don’t know what policy is going to be the law of the land tomorrow.” That anxiety was evident in the Fed’s “beige book” report, a periodic survey of businesses across the country, released Wednesday. Across industries, firms said they are pausing or slowing hiring while they wait for clarity. Meanwhile, America’s brand has taken a hit — both at home and abroad. Even some of the US’s closest allies and trading partners are struggling to see the logic behind Trump’s trade war. “The US-Canada trading relationship is profoundly damaged, and will be forever,” Wolfers said. “It’s made it politically impossible for Canada to be pro-America … That damage is done.”
Trump chaos has already damaged the economy. It may be too late to fix
TruthLens AI Suggested Headline:
"Trump's Economic Policy Uncertainty Raises Recession Concerns"
CNN
6.4
TruthLens AI Summary
President Donald Trump has recently signaled a potential shift in his economic stance, particularly regarding tariffs, as he expressed openness to easing tariffs on China and confirmed that he has no intention of dismissing Federal Reserve Chair Jerome Powell. This change in tone comes after a tumultuous period for the U.S. economy, which has been marked by significant uncertainty and volatility stemming from Trump's unpredictable economic policies. Experts, including Wendy Edelberg from the Brookings Institution, have emphasized that the uncertainty generated by the White House is more damaging than the tariffs themselves. In the wake of Trump's remarks, U.S. stock markets experienced a brief resurgence, reflecting Wall Street's relief at the prospect of a more stable economic environment. However, the markets remain down significantly since Trump took office, with over $7 trillion in value lost from the S&P 500 in just two months, highlighting the ongoing concerns about the long-term implications of his tariff agenda on global trade and economic growth.
Economists have raised alarms about the heightened risk of recession, with forecasts suggesting a 50% to 70% chance this year, largely due to Trump's erratic trade policies. Even if tariffs were to be reduced, experts predict that the U.S. economy could still suffer a decline in GDP due to the prevailing uncertainty. Kent Smetters from the Wharton School noted that the economy could lose at least 1% of GDP from policy uncertainty alone, while projections indicate a potential 5% drop if all tariffs are implemented. Business leaders are feeling paralyzed by the lack of clarity in U.S. trade policy, leading many to halt or slow hiring and capital expenditures. The repercussions of Trump's tariff policies extend beyond economic metrics, damaging the U.S.'s international standing and relationships with allies like Canada. As businesses and trading partners struggle to navigate the unpredictable landscape, restoring confidence in the U.S. economy may take considerable time and effort.
TruthLens AI Analysis
The article presents a critical view of the economic policies under President Donald Trump, particularly focusing on the chaos surrounding his tariff agenda and its implications for the U.S. economy. It highlights concerns from various experts about the uncertainty caused by the White House's erratic decision-making and how it has already inflicted damage on the economy. By emphasizing Trump's recent pivot on tariffs and the Federal Reserve, the article aims to convey a sense of urgency and anxiety about the economic outlook.
Intent Behind the Publication
The primary goal seems to be to inform the public about the potential risks associated with Trump's economic policies and to raise awareness about the significant volatility in the markets. By highlighting expert opinions, the article suggests that the president's indecisiveness and controversial policies could lead to a recession. This framing aims to create a narrative of instability and concern regarding future economic conditions.
Public Perception Being Shaped
The article seeks to instill a sense of worry among readers about the consequences of Trump's decisions. By citing experts and presenting data on stock market declines, it portrays a negative outlook for the economy, suggesting that the chaotic environment created by the administration is detrimental to financial stability. This could lead to increased public skepticism about Trump's economic management.
Potential Omissions in the Reporting
While the article raises valid concerns, it may downplay any positive aspects of the administration's policies or the potential for recovery in the markets. By focusing primarily on negative outcomes, it could be argued that the article presents a one-sided view that may not fully represent the complexities of the economic situation.
Reliability of the Information
The article appears to be based on credible sources, including expert opinions and market data. However, the emphasis on negative consequences might skew perceptions, making it essential to consider a broader range of perspectives for a more balanced understanding.
Narrative Connection with Other News
This article fits into a larger discourse about economic management under Trump's administration. Similar articles often highlight tensions between the president and economic institutions, such as the Federal Reserve, suggesting a pattern of reporting that focuses on instability and dissent.
Impact on Society and Economy
The potential scenarios following this article's publication include increased market volatility and public anxiety regarding economic policies. If the narrative gains traction, it could influence consumer confidence and spending, ultimately affecting economic growth.
Audience Engagement
The article is likely to resonate with audiences concerned about economic stability, including investors, business leaders, and the general public. It targets those who may be apprehensive about the future under Trump's presidency, particularly regarding economic policies.
Market Reactions and Stock Implications
The focus on tariffs and the Federal Reserve makes this article particularly relevant for investors and stakeholders in the stock market. Companies directly impacted by trade policies, such as those in manufacturing and technology, could see their stock prices fluctuate based on public and investor sentiment shaped by such reporting.
Geopolitical Considerations
The article hints at the broader implications of U.S. economic policies on global markets and trade relations. As the U.S. navigates its position in the global economy, the concerns raised could affect international perceptions of American economic stability.
Use of Artificial Intelligence in Writing
It is unlikely that artificial intelligence significantly influenced this article. However, if AI were involved, it might have been in analyzing market data or generating preliminary content. The writing style and critical analyses suggest a human touch, particularly in expert commentary and nuanced interpretation of economic events.
Conclusion on Manipulative Elements
While the article is grounded in factual observations, it could be perceived as manipulative due to its focus on negative outcomes and expert warnings without equally addressing any positive developments. The language used creates a sense of urgency and fear, which may influence public perception and sentiment regarding the economy.
The reliability of this article is moderate, as it presents valid concerns but may lack a balanced viewpoint that includes optimistic perspectives or potential recovery scenarios. It is crucial for readers to critically engage with such narratives to form comprehensive views.