President Trump assumed office 101 days after a campaign in which voters bought their argument that they could skillfully manage the economy and that their policy prescriptions could reinforce growth and eradicate inflation.
Then, Wednesday’s news that the nation’s gross domestic product had hired in the first three months of the year was an acute political gap and a flashing economic warning.
He arrived with the end of a quarter in which actions prices fell sharply, the performance of Wall Street sausages at the beginning of a new presidential term such as Gerald R. Ford to take out the country out of the scandal and inflation 51 years ago. And it only joined the wide uncertainty between companies and consumers about what the rest of the year could have, since Trump pursues a commercial war that is already drowning the supply chains and threatening to raise prices and lead to the shortage of components and critical products on the shelves.
It is too early to predict where the US economy is directed for the rest of the year, and Trump is still insistent that it will produce a burst of commercial agreements that will bring back to the United States and mark the beginning of a new era of prosperity.
But the figures of the first quarter began to focus political risks for him. For Mr. Trump, what is at stake is a matter of fundamental competence in a subject that he has always used to define himself.
If the report demonstrates to be an omen or a slowdown or extended recession, the situation could be the economic analogue of President Joseph R. Biden Jr., the withdrawal of Afghanistan four years ago this summer. The work approval ratings of Mr. Biden never recovered from that early debacle. Nothing he did later, not the millions of jobs created, not the great legislative victories, not the rapid response to the invasion of Ukraine of Russia, could restore meaning among the voters that it could be trusted that it will be trusted at work. Taken.
Trump found himself in the Rosas Garden on April 2, which he called “Liberation Day”, and launched a broad and punitive set of tariffs on commercial partners. He has promised that another country will come for an agreement to retrace those encumbrances and other rates that he has imposed.
A substantial number of Americans seems skeptical. In a New York Times/Siena College survey last week, 55 percent disapproved or the management of the economy by Trump, with a 43 percent approach. About half or voters disapproved or the management or trade of Mr. Trump.
Some of Mr. Trump’s economic advisors now recognize that the moment and execution of their tariff ads could be colossal errors, even if they applaud the underlying strategy. That is why, every few days, they announce new exceptions, more recent to relieve pain for American car manufacturers.
“On April 2, in arguments of the most powerful place in the world, President Trump thought he was projecting the US force,” said Matthew P. Goodman, who runs the center of Goeconomics in the W. George Bush Council and served. “But he discovered that commerce is complicated, that you must be more superficial, and that it has had to cross out of that since then.”
Trump, the billionaire real estate investor, has recognized that his strategy will bring some temporal pain to Americans, but seemed to argue on Wednesday that common Americans would barely be noted in toy stores.
“Well, maybe children have two dolls instead of 30 dolls, you know?” Hey said. “And maybe the two dolls will cost a couple more dollars than they would normally.”
Whatever the cost of a Barbie, Trump faces a fundamental time problem. It will take years for large investments that predict that they will flow to the United States to develop and cause the industrial rebirth that it has promised. Building the more vanguard semiconductor manufacturing plant, for example, can easily take five years.
“Those chips, those beautiful chips, make those fools in the United States,” Trump said in the White House on Wednesday while heading to executives and called how much he had committed to spending on new facilities in the country.
It is too early to know how quickly these investments will take off, including Apple’s commitment, acclaimed again by Mr. Trump on Wednesday, to invest $ 500 billion, including a part of its manufacturing capacity, in the United States around the next four years.
But the economic pain of tariffs could begin in a few months, with ascending pressure on prices and the shortage of industrial and consumption products made abroad.
Much of Mr. Trump’s political problem lies in that disconnection. For many of the products, Americans will pay more Chinese manufacturing products, there is no American alternative. And for many more, producing them in the United States may have no sense.
Despite all its minimism or economic groups, Trump is clearly sensitive to the possibility of being blamed for increasing prices. When the reports began to circulate this week that a Amazon subsidiary was thinking of publishing the rates that customers would pay on each product, Trump called Jeff Bezos, founder of Amazon, to complain.
Giving consumers a collapse or how many rates are costing them, the White House said, it would be a “hostile and political act.” Amazon quickly said he never approved the plan, and that would not go into force.
But many business leaders are shaken by the environment, saying that they have no way of projecting their profits for the second quarter because the economic environment has never committed more grandmergedly.
“I continue to tell them not to underestimate Donald Trump,” said David Mcintosh, president of the For Growth Club, the anti-imposed defense group whose members almost unanimously changed the return of Mr. Trump to the position.
McIntosh said it is optimistic that Trump will succeed in negotiating tariffs with Western democracies that are among the largest commercial partners in the United States. “I meet many executives who ask:” Ok, how does Donald Trump do? “And my answer is to specify your minds in” The Art of the Agreement “, that is, he is a chief negotiator.”
The way to calm the markets now, he said, is “to make the congress make the tax cut bill” and extend the reduction of taxes. Trump was promulgated in his first mandate.
Mr. McInth is pressing to expand that tax reduction, specifically by allowing companies to rule out the cost of building new production facilities immediately, instead of depreciating those costs for decades.
Trump can get some early victories. The secretary of the Treasury, Scott Besent, said Tuesday that “we are very close in India.” He added that South Korea was “sending his team to” to negotiate and that an agreement was also soon possible with Japan. Trump said Wednesday that the new Prime Minister of Canada, Mark Carney, had called it the previous day and said “” Let’s make an agreement. “
Perhaps so, but Mr. Carney also had this to say on Tuesday after winning the Canadian elections: “Our old relationship with the United States, a relationship based on constant integration, has ended. The system of the open states of global trade, a system of HASAD A. that has enchanted with the system that, although it is not perfect, has helped deliver prosperity during the decades, is finished.”
Mr. Carney has promised to reduce Canada’s dependence on its huge neighbor, without easy tasks since bilateral trade is equivalent to approximately one fifth of the country’s economy. China, the most powerful player in the commercial wars of Mr. Trump, has been looking for a similar strategy. And its leader, Xi Jinping, has all the incentives to make the next months more painful for Mr. Trump as possible.
Mr. XI has largely maintained the radio silence since Trump announced a growing set of tariffs on Chinese products, establishing himself at 145 percent after several angry and contracting movements with Beijing. That rate is so high that it essentially freezes trade; There are already reports of freighters loaded with goods that turn around, so importers do not have to pay those rates.
Mr. Trump’s commitment is that Mr. XI will flash first because the pain for the Chinese economy will be so great that he will have to attack accommodation that, about time, will allow the United States to approach normal again. Mr. XI is betting on the contrary: that Trump has overreach, and cannot resist the bad GDP numbers, the increase in inflation or the fall in the surveys.
Only one of them is right.
