When voters brought Donald Trump back to the White House last November, many believed he was the better candidate to steer the economy. But after 100 days into his second term, the U.S. economy faces unprecedented uncertainty and volatility.
Tariff Strategy Sparks Market Confusion
At the core of the disruption is Trump’s aggressive trade strategy, which includes a blanket 10% tariff on all imports, 25% tariffs on autos, parts, steel, and aluminum, and a staggering 145% duty on Chinese goods.
According to Mark Zandi, chief economist at Moody’s Analytics, “Trump’s administration has enacted more economic changes in its first 100 days than any I can recall.” The tariff policy has been erratic, with frequent revisions and sometimes conflicting announcements made within the same day.
Growth Slows, Inflation Persists
Despite campaign promises of a fast economic rebound, U.S. GDP contracted by 0.3% in Q1 2025, following 2.4% growth in the prior quarter. Economists now see a 60% chance of recession before year-end.
Inflation held at 2.5%, above the Fed’s 2% target. Grocery prices spiked early in the term before dipping, but new tariffs could reignite price pressures.
Gas prices remain stable, while airline fares fell due to weaker demand. Despite lower mortgage rates, home sales hit their lowest spring season level since 2009.
Markets and Labor: Mixed Signals
Since Trump’s January 20 inauguration, the S&P 500 has dropped by 8%. However, unemployment remains steady at 4.2%, and retail spending is holding up, according to Barclays card data.
Still, business and consumer confidence has deteriorated sharply. The University of Michigan’s sentiment index posted its worst three-month decline since the 1990s.
Survey director Joanne Hsu noted: “Consumers anticipate weaker income and slower growth in the year ahead, with fears of inflation returning and job markets softening.”
Is Demand Real or Just Preemptive Buying?
Some analysts argue that the current consumer activity is misleading, driven more by pre-tariff stockpiling than by true economic strength.
Bob Elliott, CEO of Unlimited Funds, said: “We’re seeing front-loaded purchases—cars, goods, even everyday items—out of fear, not confidence.”
Tourism, Immigration Policy Weigh on Activity
Stricter immigration measures have dented inbound tourism, with airports and airlines reporting declines in foreign travelers, particularly from Canada, according to the Federal Reserve’s Beige Book.
The White House Defends Its Strategy
Despite the mixed data, the Trump administration insists its policies are beginning to pay off.
Spokesman Kush Desai highlighted new manufacturing commitments from Apple, Nvidia, and Hyundai, tied to the “America First” economic agenda.
At a press briefing, Treasury Secretary Scott Besant said, “The data looks good. People are still spending.”
Meanwhile, White House Press Secretary Caroline Leavitt urged Americans to “trust President Trump,” calling his first 100 days “the most successful in U.S. history.”
The Real Problem: Policy Uncertainty
According to David Cef, chief U.S. economist at Nomura, the biggest threat isn’t tariffs—it’s the lack of clarity.
“If Trump laid out a clear and credible roadmap,” he said, “market confidence could return quickly. What markets fear most is unpredictability.”
Bottom line: After 100 days of Trump’s second term, the U.S. economy is caught between resilience and contraction. The path forward depends on whether the administration can provide policy stability in a time of deep economic uncertainty.
