Trump’s Tariff Strategy Sparks Economic Uncertainty and Business Chaos

By Evans Momodu
3 minute digest, updated 16:37 UK GMT, March 6, 2025.


The sequel to Trump’s ‘Tariff Man’ strategy is proving to be even more chaotic and unpredictable than before.

Each week, new tariffs are imposed or threatened, targeting both U.S. allies and economic rivals. Businesses and financial markets are left scrambling to react, as conflicting signals from the Trump administration make long-term planning nearly impossible.

The Growing Confusion Over Tariffs

The ever-changing tariff landscape has created widespread uncertainty for businesses. Some tariffs are implemented, others are shelved after CEO complaints, and many seem to disappear following "very good" phone calls with trade partners.

Business owners across the U.S. are struggling to make crucial decisions regarding:

• Hiring vs. layoffs
• Expanding vs. scaling back operations
• Raising vs. maintaining prices

???? Trevor Frampton, a pet supply store owner in California, lamented:
"Tariffs are on and then they’re off again. I can’t keep up with it. It’s frustrating, stressful, and honestly, just stupid."

Trade Policy Uncertainty Hits Record Highs

An index measuring trade policy uncertainty has skyrocketed since Trump’s re-election, surpassing levels seen during his first term and reaching the highest point since 1960.

The scale of Trump’s tariff expansion is staggering—$1.4 trillion in U.S. imports now face tariffs—triple the amount from Trump’s first term ($380 billion), according to the Tax Foundation.

Unlike previous administrations, Trump appears to use trade uncertainty as a negotiation tactic, believing that keeping the world guessing about his next move strengthens his leverage.

Ripple Effects on the U.S. Economy

The economic consequences of tariff instability are already being felt:

• Stock Market Volatility – Market fluctuations have increased due to unpredictable tariff announcements.
• Consumer Confidence Drop – Spending declined in January, marking the largest drop in nearly four years.
• Federal Reserve GDP Forecast – The latest Fed outlook turned sharply negative, reflecting recession fears.
• Private-sector Job Losses – Hiring slowed in February, with small businesses and key sectors like trade, education, and health services cutting jobs.

Mark Zandi, Chief Economist at Moody’s Analytics, warned;"It feels like the economy is gagging on the uncertainty. If this continues, we may see real economic damage."

Tariffs Fuel Trade Deficit Surge

Despite Trump’s claims that tariffs would reduce trade imbalances, the opposite has happened.

In January 2025, the U.S. trade deficit nearly doubled, reaching $131.4 billion, due to a surge in imports ahead of tariff deadlines:

• Canadian imports rose 15% to $38.3 billion
• Chinese exports to the U.S. jumped 16% to $37.5 billion
• Mexican imports increased 10% to $41.7 billion

Instead of acknowledging the impact of his tariff threats, Trump blamed Joe Biden for the trade deficit, posting on Truth Social;"Massive Trade Deficit with the World, just announced, compliments of Sleepy Joe Biden! I will change that!!!"

Business Leaders Sound the Alarm

The Federal Reserve’s ‘Beige Book’ report confirms that many businesses expect tariffs to force price increases. Some companies have already raised prices in anticipation of more trade restrictions.

Key concerns from industry leaders:

• "The back-and-forth tariff talk has been stressful and highly disruptive." – U.S. manufacturers
• "The anxiety over tariffs is making it difficult to forecast demand." – ISM service-sector report
• "The ripple effect could severely harm our business." – U.S. tech industry executive

What’s Next?

With business confidence declining and trade policy uncertainty at historic highs, the long-term economic impact of Trump’s tariffs remains unpredictable.

As more businesses struggle with supply chain disruptions, pricing chaos, and trade restrictions, the 2025 tariff escalation may prove to be one of the most economically disruptive policies yet.
Source: CNN