Trump's Honeymoon Ends: 3 Signs of Self-Sabotage

Declining Business Confidence

The National Federation of Independent Business's (NFIB) confidence index plummeted in January, erasing a Trump-induced surge. Economists attribute this to "policy-induced chaos" from Washington, particularly Trump's tariffs. Tariffs increase costs that businesses struggle to pass on, squeezing profitability. Small businesses have curtailed spending and expansion plans, signaling concerns about the economy and the impact of Trump's policies.

Weakening Voter Approval

Trump's approval ratings on economic issues are faltering. Polling shows a decline in his net approval on the economy, trade, and taxes. Voters prioritize price reduction, but Trump's actions have had little impact on food, rent, or healthcare costs. Instead, avian flu has inflated egg prices and shortages could worsen. Tariffs further threaten price increases, raising concerns among consumers and businesses.

Escalating Inflation Fears

Americans anticipate that Trump's actions will exacerbate inflation. The University of Michigan's sentiment index reveals a jump in expected inflation from 2.7% to 4.3% within a year. Tariffs are a primary driver of this concern, as they increase costs without corresponding benefits. Economists support these concerns, citing evidence from Trump's previous trade wars that tariffs harm consumers and businesses alike. While some investors believe Trump will ultimately moderate his rhetoric, the negative market reaction may already be underway.