“A tariff-induced recession is here and not here, visible and invisible—about to happen or already happening. The economy is in a state of imminence. And we should be preparing, even if we are not sure what we are preparing for.” The Atlantic
Anne Lowery from the Atlantic reports: “Now that the tariffs—145 percent on goods from China, 10 percent on goods from other countries—are in place, they are damaging the economy, even if a recession is not yet evident in the country’s quarterly GDP and monthly unemployment reports. The White House has gotten nowhere in negotiations with other governments. Weekly jobless claims are rising. Layoffs are spiking. Consumer confidence is tanking. Businesses are flummoxed, and putting off plans for expansion. Prices are starting to rise; economists expect the average family to pay $4,900 a year more for items at the grocery store and from online retailers thanks to trade restrictions.”
Per CNN Business: Imports into the United States during the second half of 2025 are expected to fall at least 20% year over year, according to the National Retail Federation. The decline from China will be even starker: JP Morgan expects a 75% to 80% drop in imports from there. “If not easily replaced by imports from other countries, a collapse of this magnitude would not only sharply boost prices but also significantly disrupt supply chains,” JP Morgan detailed in its report. That means less work, higher prices on shelves and fewer choices for consumers. Seroka says the countdown has already begun.
Says Lowery: “A supply shock is beginning to ripple across the nation. In the coming months, consumers worried about looming shortages and rising inflation are likely to make panic orders and hoard household goods. Businesses worried about empty shelves are likely to restrict purchases. Even Americans who pay little attention to the news will notice their neighbors stocking up, and start to do the same. . . .”
As inflation climbs, the economy is going to slow down. The Trump administration and Republican Congress are seeking to slash government spending. At the same time, businesses won’t hire new workers; existing employees will cling to their jobs. That alone will be enough to push up the unemployment rate. . . .as the coronavirus pandemic taught us, supply chains take years to repair once disrupted. Inflation tends to take a long time to return to normal.*!