Former President Donald Trump’s decision to suspend newly enacted tariffs for 90 days may have pulled the American economy back from the edge—for now. But this short-term reprieve does little to reverse the economic instability and political uncertainty that has been building due to his erratic economic strategy.
Rather than steering the U.S. toward sustained growth and global leadership, Trump’s unpredictable trade tactics and ongoing tariff threats have disrupted global markets and raised fears of a recession. Many economists argue that Trump’s administration is actively dismantling the post-World War II global economic order the U.S. helped build and lead.
His 2024 campaign has leaned heavily on promises to rejuvenate the American economy. However, his administration’s trade wars, inflationary policies, and unpredictable decision-making tell a different story—one that could carry steep political consequences in the upcoming election cycle.
Trade Wars, Uncertainty, and Growing Recession Fears
Trump’s push for favorable trade deals isn’t inherently problematic. But the lack of a coherent policy has created confusion in financial markets and among American consumers. Trade wars and aggressive tariffs have disrupted key supply chains, led to higher prices for everyday goods, and rattled investor confidence.
Jeremy Siegel, a respected professor at the Wharton School, labeled Trump’s tariff campaign as “the biggest policy mistake in 95 years.” The markets briefly rallied after the tariff pause announcement, but gains were quickly erased as new tensions with China emerged.
The stock market volatility reflects the broader instability stemming from the administration’s approach.
Even within the Republican Party, alarm bells are sounding. Senators such as Chuck Grassley (R-Iowa) and Representatives Don Bacon (R-Neb.) and Josh Gottheimer (D-N.J.) have pushed bipartisan legislation to rein in presidential tariff powers.
In a surprising twist, Trump ally Ted Cruz (R-Texas) criticized the White House’s long-term commitment to high tariffs, suggesting fractures within Trump’s own political base.
Wall Street, Main Street, and the Illusion of Protectionism
Trump’s economic policies are billed as populist measures aimed at helping Main Street rather than Wall Street. Treasury Secretary Scott Bessent and other officials argue that tariffs protect domestic industry and shield American workers from unfair foreign competition.
But that narrative is flawed.
Polls reveal that nearly two-thirds of Americans—63%—say that the performance of the stock market directly affects them, including many Trump supporters. That undercuts the idea that Wall Street’s struggles don’t matter to everyday Americans.
Meanwhile, global investors are growing increasingly wary of U.S. economic leadership. Foreign confidence in the U.S. dollar and Treasury bonds is weakening. The 10-year Treasury note, which influences mortgage rates and other borrowing costs, has become alarmingly volatile. In the past month alone, the dollar has dropped nearly 4% against major world currencies.
The last time similar market instability occurred was during the 2008 financial crisis—hardly an encouraging parallel.
Economic Dissonance and Electoral Fallout
Public sentiment toward the economy is turning sour. According to a recent Economist/YouGov poll:
- 53% of Americans believe the economy is getting worse.
- 55% disapprove of Trump’s handling of inflation.
- 51% disapprove of his overall economic management.
CBS polling also reveals that 64% of voters believe the administration isn’t focusing enough on lowering prices, while 55% think it’s focusing too much on tariffs. These numbers suggest that Trump’s economic message is increasingly falling on skeptical ears.
Even more concerning for Republicans: 42% of voters, including 49% of independents, believe Trump’s policies will make them personally worse off—up 14 points since January. If economic dissatisfaction continues to grow, Trump’s base could erode, making re-election far more difficult.
Can Republicans Break the Midterm Curse?
Historically, the party in power loses ground in midterm elections. In fact, this has happened in 14 of the last 20 cycles, according to Reuters. For Trump and the GOP to defy that trend, they would need to present a unified front, implement meaningful economic reforms, and show voters they can govern effectively.
So far, they have failed on all three counts.
Trump’s long-promised budget package and tax cuts have been stalled by resistance within his own party. Conservative Republicans in the House refused to support the proposal without deeper spending cuts. Although the House Freedom Caucus eventually relented, the drama highlights continued internal GOP divisions.
If Trump can’t deliver on key economic promises, voters may interpret it as proof that Republicans are incapable of steering the country forward. The very same economic discontent that helped elevate Trump in 2016 could be the force that pushes him out in 2024.
Conclusion: A Warning Sign for 2024 and Beyond
Trump’s “America First” economic policies may have sounded appealing on the campaign trail, but in practice, they have created more problems than they’ve solved.
From market instability and trade wars to inflation and weakening global trust, the consequences of Trump’s economic approach are becoming increasingly clear.
Unless there is a sharp pivot toward stability, transparency, and cooperation, Trump’s strategy could backfire—politically and economically—leaving Republicans to pay the price at the ballot box.
For further analysis on how Trump’s trade policies are influencing global markets, visit Brookings Institution.
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