Concerns are growing over the impact of President Donald Trump’s economic policies, as new tariffs, workforce reductions, and spending freezes raise fears of a downturn.
While the labor market remains stable, recent job losses and economic uncertainty have sparked worries about the country’s financial future.
The latest employment report showed a 4.1% unemployment rate, with 151,000 jobs added in February. Trump has pointed to investment commitments from major companies like Apple and Taiwan Semiconductor Manufacturing Company as proof of his economic success. However, the same report revealed troubling signs. The number of people forced to work part-time due to economic conditions surged by 460,000 last month, while the leisure and hospitality sectors—key indicators of consumer spending—lost 16,000 jobs. Additionally, the federal government cut 10,000 positions, raising concerns about the broader economic outlook.
Since January, the economic policy uncertainty index has jumped 41%, reaching a level that has historically signaled a potential recession. Stanford University economist Nicholas Bloom, who helped develop the index, warned that the situation could worsen.
“I fear we may be heading toward what could be known as the ‘Trump recession,’” Bloom said, citing policy instability and escalating trade tensions as major risks. The last U.S. recession occurred during Trump’s presidency due to the coronavirus pandemic.
Despite these concerns, Trump has defended his approach, arguing that the economic disruption caused by tariffs will ultimately strengthen the country by bringing more manufacturing jobs back to the U.S. If successful, his strategy could reinforce his reputation as an unconventional leader who defied economic norms. However, if the tariffs backfire, everyday Americans could face higher inflation, job losses, and lower wages.
During an interview set to air Sunday on Fox News, Trump was asked to clarify his tariff strategy. Instead of providing a direct answer, he blamed the recent 6% stock market decline on “big globalists” and hinted that tariffs could continue to rise.
“You know, the tariffs could go up as time goes by,” Trump said. “I don’t know if it’s predictability.”
The White House insists that the latest jobs report proves the administration’s strategy is working. Manufacturing saw a gain of 10,000 jobs, with 8,900 of those in the auto industry—recovering some of January’s losses. The administration also claimed that job losses in leisure and hospitality were temporary, attributing them to seasonal flu outbreaks and financial struggles from the previous Biden administration.
Kevin Hassett, director of the White House National Economic Council, called the report “impressive” and argued that tariffs are encouraging companies to bring jobs back to the U.S.
“This is the first of many reports that are going to look like this,” Hassett said, referring to the increase in industrial jobs.
However, financial experts are less optimistic. The recent stock market decline has cast doubt on the administration’s claims that tariffs will boost job growth. John Silvia, CEO of Dynamic Economic Strategy, warned that the economy is heading in the wrong direction.
“Markets anticipate,” Silvia said. “The turn down the dark alley of tariffs signals higher inflation, slower economic growth, and a weaker U.S. dollar. It is an economic horror movie in slow motion.”
With fears of a trade war escalating, the long-term effects of Trump’s economic policies remain uncertain. While the White House remains confident, investors and economists are watching closely for signs of a deeper economic slowdown.