#TariffPause

The U.S. economy in 2025 is showing clear signs of deceleration, even before the full impact of President Trump’s elevated tariffs is felt. Consumer confidence has plummeted to its lowest point in three decades, with the University of Michigan’s index recording a 32% decline since January . This decline reflects growing concerns over inflation and future income growth, leading to more cautious consumer spending. 

Economic forecasts have been adjusted downward; the IMF now projects U.S. GDP growth at 1.8% for 2025, nearly a full percentage point lower than pre-tariff estimates . Similarly, a Reuters poll indicates expectations of just 1.4% growth, with a 45% chance of recession within the next year . The Atlanta Fed’s GDPNow model even predicts a 1.5% contraction in Q1 .   

Trade tensions are exacerbating the slowdown. Trump’s tariffs, reaching up to 145% on Chinese imports, have led to a 45% year-on-year drop in container bookings and a 30% decline in airfreight from China . These disruptions are causing supply chain uncertainties and rising costs for businesses.  

While the administration suggests that new trade deals and tax relief will stabilize the situation, critics argue that reversing recent tariff policies is essential to prevent a deeper economic downturn. The combination of cautious consumers and trade uncertainties is casting a shadow over the U.S. economic outlook for 2025.