Trump’s endless trade threats come at a growing cost

Subscribe to enjoy similar stories. AMERICA’S ECONOMY is looking peaky. Inflation expectations are creeping up.

On March 25th consumer confidence fell to its lowest in 12 years. But Donald Trump, the country’s president, says relief is at hand. “Liberation day" for the economy will arrive on April 2nd, he proclaims, when he intends to slap hefty new tariffs on imports from all over the world.

Since tariffs are in essence a tax on consumers, this is the sort of liberation that most corporate bosses and investors would happily do without. As a consolation prize, they may be hoping that April 2nd will at least bring certainty. Even this hope may ultimately prove forlorn, however.

Although April’s tariffs are intended to be “reciprocal", which means they would match those levied by other countries on American imports, the president has in recent days cast doubt on that idea. He has said that America “may be nicer" to some countries, without going into details. All this confusion is paralysing parts of the American economy.

On March 19th Jerome Powell, the chair of the Federal Reserve, talked of “remarkably high" levels of economic uncertainty. “I don’t know anyone who has a lot of confidence in their forecast," he said. Companies that serve as bellwethers for broader economic performance have started to suffer.

When FedEx, a logistics company, lowered its full-year profit forecasts on March 20th, it cited “uncertainty in the US industrial economy". On March 10th Delta Airlines said “macro uncertainty" was reducing consumer and corporate confidence. Broader surveys back up such anecdotes.