Trump's customs chaos endangers the already weakening economy

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The health of the US economy becomes more unstable every day. The Dissolations climb, and the Consuming editions -the backbone of the economy-unexpectedly dropped in January. At the same time, consumer confidence has experienced a dramatic decline. An important forecast for GDP has suddenly become negative. The extreme fear can also be felt on Wall Street while the share prices fall.

tariff threats and their effects

Despite this uncertain picture, President Donald Trump continues to set chaos in the economy with almost constant collective bargaining threats. From Tuesday, he plans to raise a 25% tariff on imported goods from Mexico and Canada and to double the tariffs on goods from China to 20%.

These tariffs, if they are actually imposed, the costs for the Americans could increase, while inflation remains stubborn. This could take the Federal Reserve the opportunity to reduce the loan costs, which further affects consumers' living costs.

Mexico and Canada have already announced that they are responding to US goods with their own tariffs, which increases the potential for a trade war within North America. China also has an answer to higher tariffs promised.

The uncertainty burdens

The threat of tariffs already leads to confusion and uncertainty that makes it difficult to create investors, CEOs and consumers. A measure of this uncertainty, the Index for Handelsungwissheit , rose to the highest value since 1960. current threats of tariffs from the White House.

Jay Foreman, the CEO of Basic Fun!, a toy company that produces products such as Care Bears and Tonka trucks, explained that his company could only begin to deal with the 10%tariffs that Trump has raised to all Chinese imports. Now he may be faced with a “further financing gap of $ 5 million”.

About 90% of the toys, the basic fun! Sold, are manufactured in China. By 2026, the company is forced to fully absorb the additional costs for tariffs, since contracts have already been signed with customers. "Any plan we have to alleviate a 10%customs is not feasible if there is a 20%inch," continues Foreman.

economic fear of growth

The concerns about economic growth recently became clear when a much -noticed forecast for economic growth on Friday was drastically corrected downwards. The

Instead of starting a trade war, Yardeni Trump advised "to complete a deal and claim victory" with Canada and Mexico. "Customs are a dangerous terrain. You shouldn't stay there too long," he added.