President Trump has switched his message about the economy as he continues to grow from voters and even fellow Republicans about his trade agenda.
Trump has acknowledged the pain the US economy could face under sudden import taxes after months of expressing unashamed confidence in his plan to charge cleaning fees.
The latest economic blow to Trump came through a disappointing report on economic growth on Wednesday. This fell sharply in the first quarter due to a surge in imports ahead of the president's tariffs.
Trump and his top economic staff touted the strength of other parts of the economy and dispelled the effects of tariffs, but the president tried to condemn former President Biden's decline.
Trump acknowledged that tariffs could push prices up and lead to a lack of property, urging business leaders on Wednesday to be patient with him, admitting that American consumers might just have to laugh and endure.
“Someone said, 'Yeah, the shelf is open.' Now, kids may have two dolls instead of 30 dolls.
Trump's tariff comments go against his previous position on their economic impact, representing a departure from his pledge following the highest level of inflation in 40 years.
“Taxes don't cause inflation. They cause success,” Trump said the administration later stopped when he announced 25% tariffs in Mexico and Canada earlier this year.
Trump's new tone assumes that consumers will support tariffs despite the price impact. This is a point the president has previously admitted.
“There could be a temporary short-term confusion and people will understand,” he said in his oval office in January.
The change in the message comes as Trump faces escalating backlash from the business community, concerns from Republican allies, and a rapidly declining approval rating.
Trump's strength in the economy has hit him in recent weeks, his biggest selling point for US voters in 2024.
Pew voters discovered Trump's 45% economic confidence rating in April. Lowest rating With such a survey since 2019.
Economic confidence in Trump is 44% Voting from Gallupclose to his first term average. Trump's economic approval rate is still higher than Biden, who fell below about 35% in 2023.
The economic outlook for Americans has deteriorated in various surveys, with 45% of Pew respondents saying things will get worse compared to 37% who said it last month in March.
Trump's approval rating has also slipped into the overall ranking. This is a typical trend for most presidents right after the election. Since January, his approval rate has fallen from 47% to 44%. Recent Gallup votes.
Trump also lost the ground in Ohio this week. Approximately 47% of survey respondents who approved his performance compared to 50% in a comparable survey in February.
Even Trump's stubborn Republican supporters in Congress have been wary of the president's agenda.
“I don't think there's any doubt that tariffs and trade wars have injected a lot of uncertainty and instability into the economy. I think investment is draining what I'm hearing from businesses. That's not good,” Sen. R-Wis said.
A growing rebound occurs as tariffs begin to appear in consumer spending data. Commerce data showed Wednesday that spending on cars and parts increased by 57%, Commerce data showed.
The front-loading of imports by US wholesalers was big enough to take a bite of GDP for the first quarter.
Companies have signed contracts with China and pressured the president to overthrow tariffs. According to the International Monetary Fund tally, the US tariff rate is above 25%, the highest level in over a century.
The United States' top business lobby, the Chamber of Commerce, sent a letter Wednesday to Treasury Secretary Scott Bescent, calling for “immediate action” on tariff relief, warning the risks of the recession.
“Even if it only takes weeks or months to reach an agreement, many small businesses will do irreparable harm,” writes indoor president Suzanne Clark.
The letter follows a meeting between Trump and the CEO of a major US retailer, during which the boss reportedly warned about empty shelves in the store.
The meeting was to “discuss the path to advancement in trade.”
New data on Wednesday showed that inflation was falling ahead of the full impact of Trump's tariffs, even if the president acknowledged the possibility of higher prices from his policies.
The personal consumption expenditure (PCE) price index slowed to an annual increase of 2.3% in March, down from 2.7% in February, close to the Fed's target rate of 2%. Excluding food and energy in the more volatile categories, PCE prices have eased to an annual increase of 2.6%, the lowest level since last June.
Some investors have isolated the impact of boosted imports, encouraged by GDP numbers, despite headline slump. This is a subtraction of the overall calculation.
“GDP growth was booming,” wrote Scott Helfstein, Head of Investment Strategy at Global X ETFS, in the commentary. “In a normal world, the Fed is pretty close to claiming victory. Unfortunately, policy communications and decisions are celebrating the ice.”
Trump told business leaders this week that his policy needs “a little time.”
“I think you have to give us a little time to move,” he said Wednesday at an event with the head of SoftBank, Toyota Motor North America, Worldwide Amazon stores and Eli Lily.
