Tom Barr — An Associated Trade Representative in the U.S.: After Trump’s Rulings, Trump Promised a “Golden Age” for the Economy
“Somebody reached out to us from Ford Motor Company,” Barr said. “They’re investigating it. They want to know what their options are, so they’re not saying they’ll do anything. So without these tariffs, those phone calls wouldn’t even have taken place.”
Tom Barr, a third-generation mold maker in Michigan, makes plastic injection molding equipment for the auto industry, among others. He has been losing business to competitors in China since Trump’s tariffs took effect, so he has begun to inquire about bringing their orders back to the US.
Source: Trump promised a ‘golden age’ for the economy. Then he unveiled tariffs
The Consumer Confidence Index: Trump’s Import Taxes, the 2008 Housing and Auto Parts Tax and the Declining Stock Market
“At the end of the day, it’s just a tax on the end consumers,” Carpenter said. “We’re definitely losing business. We’re not losing it to a competitor. We’re just losing the opportunity for a sale.”
Carpenter runs a furniture and lighting store in Boston and imports most of his lighting fixtures from China. The 2008 housing crisis was worse for his business than the current tariffs are.
But Trump’s tariffs are not sure. And most analysts are predicting more chaos to come. The president’s recent modifications now require automakers who assemble their vehicles in the US to file for partial reimbursements on 25 percent tariffs levied on auto parts for two years. As a result of Trump’s actions, these car companies have been left with a whole mess in their laps, while also having to relocate a lot of their supply chains to the US.
The falling stock market has also taken a toll on confidence. The S&P 500 was down 7 percent since Inauguration Day, while the tech-laden Nasdaq was down 11 percent. It’s the market’s worst start to a presidency since the 1970s.
While the job market has so far held up well, with an unemployment rate of just 4.2% in March, the Conference Board’s survey found expectations about the job market are the worst since 2009, when the economy was hemorrhaging hundreds of thousands of jobs every month.
“At the end of the day, the recession is about the loss of faith,” said Zandi. Consumers don’t feel confident that they will be able to hold onto their jobs, so they cut back on spending, which leads to a recession.
The Conference Board’s index of consumer confidence has fallen for five months in a row and has now become more concerned about tariffs than inflation. Many people surveyed are worried that a recession will result from Trump’s import taxes. The confidence index’s forward-looking components are much below what a recession typically looks like.
The economic growth rate seems to be slowing. The stock market has dropped sharply. And consumer confidence has tumbled to its lowest level since the onset of the COVID-19 pandemic.
The Commerce Department will release figures on the first quarter of the year on Wednesday and are expected to show that the US economy grew more slowly than in the last quarter of the year.
The Biden administration and the early months of Trump’s term are covered in the quarterly GDP report.
The surge in imports dragged growth down, as businesses and consumers raced to stock up before Trump’s tariffs took effect. Net positive for GDP is the result of imports.
“Consumers continued driving the train, but they have less gusto than they have in the past,” said Mark Zandi.
Automakers are in the Dark: Donald Trump’s Auto Tariff Cuts Cannot Predict the Future: Commentary of Dan Ives
A transportation editor with over ten years of experience covers EV, public transportation, and aviation. His work has appeared in The New York Daily News and City & State.
It started last week with Tesla, followed quickly by General Motors, Mercedes-Benz, and Volvo. Automakers across the spectrum are pulling their profit guidance for the year because they can’t figure out how to accurately plan for the future thanks to President Donald Trump’s ever-shifting tariffs.
The auto industry is in the dark. Stellantis, the parent company of Jeep, Dodge, and Ram, also recently scrapped its outlook for the year, with Chief Financial Officer Doug Ostermann telling analysts, “Most of us are in a period of waiting for a bit more clarity,” according to Reuters.
Ultimately, most analysts are sticking with their predictions of higher prices for new cars that will almost certainly be passed along to consumers. Wedbush’s Dan Ives said Trump’s most recent tweak to the auto tariffs “sounds good on paper,” but still won’t prevent disaster from descending on the industry. He said that car companies across the board are facing “a brutal situation.”
Car companies hate this stuff. These are global, multibillion-dollar companies that like to plan years — if not decades — ahead, weighing investments in factories and new models based on sales predictions and forecasts. Market certainty is the foundation of all this.
Today the rules of the US trade game are not compatible with the industry’s experience and many factories/production hubs could take 4–5 years to build in the US, and this speaks to the massive frustration from the industry.
The situation is fast approaching a crisis, with all major auto stock prices trading lower each successive day. Customers are panicking, dealers are scrambling, and new models are being put on hold. It’s like being trapped in purgatory, and there’s no immediate sign that anyone is getting out.