The unpredictable policies embraced by US President Donald Trump are shocking and infuriating Washington’s friends, generating panic among American consumers, eroding investor confidence, creating uncertainty and so compromising the established world financial infrastructure.
Under Trump, the US government has raised tariffs and caused upheaval in stock markets that results in company bankruptcies.
As the US economy would be vulnerable to the approaching inflation and recession concerns, US consumers could soon complain about the cost of home items. While authorities and staff members of public and private companies deal with more uncertainty and the possibility of job loss, astute business executives are screaming against Trump’s erratic policies.
The S&P 500 index dropped another 4% in the week to March 12, The Economist reports, leaving the most followed stock market in the world down almost 9% since its recent top. Mostly mostly of tech companies, the Nasdaq index has dropped by 12%. It is not exactly the audacious new era of American expansion promised by Trump throughout his election campaign. Unpredictable trade policies of the president have started things moving.
In the most recent turn in Trump’s trade story, on March 12 he imposed 25% tariffs on steel and aluminium imports. Following years of expansion, the state of the US economy raises questions as well; a consistent stream of negative statistics sets one on edge.
Consumer prices increased more slowly in February than predicted according to statistics. However, the alleviation for consumers also suggests that the American economy is turning into a slower gear. Such headlines are starting to challenge the concept of American exceptionalism; after all, this year investors have enjoyed far superior returns in China and Europe.
Based on S&P Global Market Intelligence, CNN said US business bankruptcies for the first two months of 2025 totaled 129, the highest amount for this period in a year since 2010 following the Great Recession.
The US stock market hit all-time high just twenty days ago. The American economy seemed to be expanding somewhat steadily. And there was not a recession anywhere visible. The R-word is apparently all around us now. Stock market volatility is being rocked by recession concerns. Forecasts of GDP are being cut. Trump and his economic staff are under fire for a potential recession and neglecting to allay growing economic anxiety.
Regarding Trump’s tariffs on Canada, provincial Mark Carney of Canada cautioned that a predatory America wanted “our water, our land, our country”.
Prominent regional expert and Centre for South Asia and International Studies Islamabad Executive Director Dr Mehmoodul Hassan Khan said it appears that “Trumpcession” is gathering momentum further, consolidating speculations of an impending recession in the US that are rattling its stock markets and the economy both.
Apart from that, Trump’s brinkmanship and stop-start strategy while levying tariffs on Mexico, Canada, and China has kept common consumers and markets (crude oil and gold) under constant flux under attack.
Surprisingly, Trump was raising the spectre of a US recession, which had risen from 15% to 20%, putting his political whims and wishes ahead of the strength of the economy and the stock market right from the beginning.
Furthermore causing a significant budget deficit are political inclusiveness, policy ambiguity and conflicting messages. The US government should get a wake-up call from the first five months of fiscal year 2025, which show a record deficit of $1.147 trillion including $307 billion in February 2025, therefore underlining the potential of a government shutdown.
Still far off is Trump’s promise of launching the Americans into a fresh period of wealth. Economic follies have escalated suffering in the economy. Recession risk would increase even more if the US government stayed dedicated to its contradictory trade and economic policies in spite of increasingly worse data.
Big reduction in the government staff and expenditure worry businessmen and investors. Extreme decline in retail sales clearly shows low consumer confidence and excessive inflation. Therefore, a decline in the stock market could set off an additional tightening of expenditure, particularly among higher-income households.
Though the risk of recession is real like wolves knocking at the door, Trump’s warning of a little disturbance before bringing wealth back to America clearly shows doomsday ahead of prosperity and stability and increases chances of recession-cum-adjustments, corrections and preferences.
Statistical data of many multinational corporations unequivocally shows the US policies slanted away from growth and snaking of its 500 greatest enterprises, indicating a major risk of recession.
Regarding American suffering, Khan remarked, ” Ironically, by courting his fans Trump never said that there would be a recession on the route to his so-called new golden age. The Black Monday should not be labeled as a fleeting blip but rather as an economic blast headed away from the promised wealth to cause escalating uncertainty and crisis.
” Setting off trade wars with US neighbours, indiscriminately firing thousands of government workers, pursuing a global exit policy [USAID, WHO, WTO, climate change agreement] and punishing the weaker nations are fracturing an 80-year bond of trust with allies directly harming its economy, industries, segments of society and supply chains.”
The last thing the US needs is a president creating uncertainty; now, consumer confidence is dropping, hiring is falling, and recession concerns are rising.
Constructive rivalry and cooperation with all trading partners, including China, might help to prevent the US economic downturn from being exacerbated by mindless following so-called instinct spirits achieving nothing but great instability.
