This is President Trump's Economy: Margaret Brennan

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Margaret Brennan, host of CBS' "Face the Nation," on this week's lineup and the political impact of this week's tariff reversal. She speaks with Bloomberg's Tom Keene and Damian Sassower.

Donald Trump’s “Liberation Day” tariff announcement set off the most volatile stretch of his second term, with financial markets descending into chaos, China unleashing retaliatory measures and the US president pausing some levies only hours after they took effect.

The whiplash made for a dramatic reminder to shoppers and companies that Trump’s trade policy can change on a dime. That unpredictability, economists say, is likely to be a drag on spending and investing.

And after all the back-and-forth, the average US tariff rate is still as high as it’s been in more than a century – and is nearly 24 percentage points higher than when Trump took office, according to Bloomberg Economics.

“There has never been so much experimentation of tariffs in the past nor this large of scope,” according to Denish Shah, professor of marketing at Georgia State University’s Robinson College of Business. “Consequently, consumers are panicking.”

Friday brought a fresh signal that consumers were queasy even before Wednesday’s policy shift. US consumer sentiment tumbled to the second-lowest level on record in a University of Michigan survey, as inflation expectations soared to multi-decades highs. That result was based on interviews from March 25 through April 8, before the change in tack on tariffs.

Jackie Cramer is one shopper who is bracing for financial impact. The 76-year-old retiree in Pittsburgh already bought a new television and sound system ahead of the tariffs and has been stocking up on coffee and canned goods. She’s also worried she’ll have to sell her house and downsize as a last resort.

“I’m watching my money just literally disappear in front of my face,” she said on Wednesday.
Cramer said she thinks the tariffs will cause long-term damage to the country.
“It’s a really difficult time for the American people right now,” she said. ”We have no idea what to expect — it’s like living on a roller coaster.”

Higher Costs
Businesses, especially those that source goods in China, are finding it challenging to navigate the turbulence.

Tarptent, a California-based seller of outdoor gear, asked its China-based manufacturer to cancel current purchase orders pending a dramatic decrease in tariffs, said Henry Shires, the company’s president.

The last shipment Tarptent received, at a much lower tariff rate than the at least 145% Trump has imposed on China, raised costs by more than $41,000.

Tarptent is talking to a US manufacturer that already makes some of its tents about increasing production. But Shires estimates that about a third of his product line can’t be made anywhere but China, or at least not to the same precision and quality level. That means that for now he’ll likely carry a slimmed-down catalog.

“We’re really kind of throwing our hands up in the air,” he said.

Michael Simpson, owner of a discount Catholic goods store in Albuquerque, New Mexico, is feeling similarly constrained. Many of his items are manufactured in Asia, and he expects he’s going to have to raise his prices.

“You just cannot get a plastic bottle for holy water that’s not made in China,” he said.

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