Will Trump’s Trade and Stock Policies Doom the US?

Amid rising tariffs, soaring inflation, and a volatile stock market, could Donald Trump's economic policies potentially lead the United States to ruin?

A Second Trump Term: Heading for a Recession?

The re-election of Donald Trump raises concerns, especially on the economic front. His policy, marked by a series of counterproductive decisions, is setting off alarms amid dismal economic indicators.

Alarming Signals

U.S. household consumption dipped in January 2025. The stock market saw significant declines, even for giants like Tesla. Unemployment rates rose in February. Growth forecasts for the first quarter of 2025 predict a 1.5% recession.

The Impact of Trump’s Policies

Donald Trump’s insistence on imposing high tariffs has significant repercussions. Major U.S. trade partners, from Canada to the European Union, China, and Mexico, are affected. This measure fuels inflation and consequently, “household morale is down,” explains Henri Sterdyniak, an economist at OFCE.

Moreover, Trump’s aim to reduce immigration leads to a potential loss of low-cost labor. This results in higher production costs and fewer recruitments.

A Damaging Climate of Uncertainty

The uncertainty generated by Trump’s radical and shifting policies undermines the economy. Industrialists are unsure where to invest, which stifles economic activity.

Beyond the measures taken, it is this uncertainty that most harms the economy, according to Urszula Szczerbowicz, associate professor of economics at Skema Business School. “The economy hates uncertain environments,” she adds.

Finally, the technology bubble, which has been driving the stock market in recent years, appears to be on the verge of bursting, according to Véronique Riches-Flores, a specialist in international economic and financial forecasting.

Facing the threat of a recession, the U.S. will need to find innovative, even “grotesque,” solutions, according to Véronique Riches-Flores. This could include, for example, a $5000 check for every American, an idea proposed by Elon Musk.