For over a month, Donald Trump has been signalling the possibility of imposing significant tariffs on the United States’ two largest trading partners, Canada and Mexico. The moment of truth is approaching.
The president faces a significant risk as his extensive tariffs, including measures against China, could increase prices for both businesses and consumers in the coming months. This situation threatens the overall health of the US economy, a concern that resonates deeply with the American public.
Last November, the economy and inflation emerged as primary concerns among voters—issues that Trump vowed to tackle as he returned to the White House, fuelled in part by ongoing dissatisfaction with the rising prices that marked the early days of the Biden administration.
Former President Trump can confidently assert that he has fulfilled numerous bold campaign pledges, such as reducing the number of federal jobs, intensifying immigration enforcement, and officially acknowledging only two genders.
However, the new Trump administration has achieved minimal concrete advancements regarding inflation. The soaring prices of eggs have become a constant reminder in everyday life. The widespread culling of chickens due to bird flu has significantly impacted the cost of this essential food item, keeping inflation at the forefront of voters’ concerns.
On Monday, Trump announced the impending 25% tariffs on goods produced in Canada and Mexico. This decision triggered a significant decline in US stock markets, marking the largest drop of the year and signalling potential economic instability stemming from his policies. Trump’s tariffs on Mexican food imports are poised to impact American consumers significantly, potentially leading to increased prices at grocery stores nationwide.
A recent CBS survey reveals that 82% of Americans believe the economy ought to be a top priority for the president. A mere 30% expressed that sentiment regarding tariffs.
Just 36% of those surveyed believe that Trump is significantly emphasising the economy, while a striking 68% feel the same about his focus on tariffs. Only 29% of individuals think that Trump is focusing on inflation as a priority. Public sentiment regarding the economy continues to be largely pessimistic, with 60% of respondents describing the situation as “bad,” a slight increase from the 58% who held the same opinion last year.
Public sentiment regarding Trump’s economic management is closely divided, with a survey indicating a 51% approval rate, falling within the margin of error. The correlation between his overall job rating and the current economic conditions suggests that the future of this president, similar to that of his predecessors, will depend significantly on financial performance.
Clifford Young, president of public affairs at polling company Ipsos, asserts that Trump remains in the honeymoon phase of his presidency, during which Americans are likely to afford him some leeway in his actions.
He noted that the benefit of the doubt typically afforded to a new president lasts approximately six months; however, this period can be significantly shortened if the economy experiences a dramatic shift. Trump contends that his tariffs will enhance US manufacturing, increase tax revenue, and stimulate investment. However, most economists caution that this could lead to higher prices for American consumers, possibly within a comparable timeframe.
On Tuesday night, during a primetime address to a joint session of Congress, Trump is set to present his argument that the immediate challenges posed by his tariff strategy will ultimately yield long-term advantages. This presents an opportunity for him to persuade the American public to extend the favourable period of his administration.
“I would like to observe how he connects government efficiency to economic performance, global tariffs to economic outcomes, and even immigration to the overall economy,” stated Young. “In an ideal scenario, he would present a case that all of his various initiatives are fundamentally aimed at enhancing the economy.”
The president faces a significant challenge as emerging indications suggest a rise in doubts regarding the economy, accompanied by warning signs of potential obstacles ahead.
Last week, the Conference Board, a non-partisan economic research organisation, unveiled a survey revealing a significant decline in consumer confidence among public and private businesses, marking the steepest drop since August 2021. Concerns over inflation and economic disruptions stemming from increasing tariffs have significantly contributed to the deteriorating sentiment among US consumers.
In January, inflation, indicated by the Consumer Price Index, increased by 3%, reaching its highest level in six months. A recent CBS poll suggests a consensus among the public, with 62% of Americans stating that they have observed increased prices over the past few weeks.
White House officials maintain that the administration’s initiatives aimed at cutting government costs, reducing regulation, and enhancing energy production are expected to result in lower prices despite the challenges posed by increased tariffs. However, they emphasise that these efforts require time to yield tangible outcomes.
During a television interview on Sunday, Treasury Secretary Scott Bessent revealed that President Trump intends to appoint an “affordability tsar” aimed at tackling the issues faced by “working-class Americans”.
Bessent stated, “President Trump claimed he will take ownership of the economy in six to twelve months,” implying that the current economic conditions result from former President Joe Biden’s policies.
“Efforts are underway daily to reduce these prices.”
Although Tuesday’s speech does not qualify as a formal State of the Union address, Trump can discuss his current actions and future plans to address voter concerns.
Any missteps could provide Democrats, who have been grappling with how to challenge the new president, a potential opportunity effectively. The selection of newly elected Senator Elissa Slotkin as the rebuttal speaker indicates a strategic emphasis on economic matters, particularly given her representation of the trade-dependent industrial state of Michigan.
Currently, Trump finds himself at the pinnacle of his political influence. He now seems prepared to leverage that authority to transform the United States trade policy approach, which has engaged him for over forty years.
American history is replete with the names of presidents who negative public perceptions regarding the economy have brought down.
Specific financial disruptions lie beyond the control of the White House. Trump is taking a significant gamble in his recent tariff decision, banking on the notion that the American public will ultimately endorse his choices.
If his assessment proves accurate, the outcome could lead to a significant political realignment for generations regarding this matter.
If he is mistaken, it may jeopardise the success of his second term before it has the chance to commence fully.
