Economists say Trump tariff threats, DOGE job cuts are 'chilling' the economy

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Cypress

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Economists say Trump tariff threats, DOGE job cuts are 'chilling' the economy​

Economists say the uncertainty from President Donald Trump’s tariff threats and mass layoffs of government workers are starting to have a “chilling” effect on the U.S. economy.

“It’s a very difficult business environment, because they can’t plan for what their cost structure is going to be,” said Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security. “It’s adding to investment uncertainty, and some people are holding back on investments.”

Trump has so far imposed 10% tariffs on Chinese imports and says he’ll impose additional 10%, plus 25% tariffs on Canada and Mexico on March 4. Trump also says he will impose “reciprocal tariffs” that match the duties other countries levy on the U.S. That comes on top of tariff plans on cars, semiconductors, steel and aluminum. Even if Trump doesn’t ultimately move forward with all his tariff threats, the mere uncertainty has a chilling effect.

Meanwhile, the Department of Government Efficiency’s slashing of the federal workforce across the country “also impacts consumption, because people are losing their jobs or are afraid of losing their jobs, so that might cause them to save more money,“ Ziemba said.

This week, The Conference Board’s consumer sentiment survey found that it registered the largest monthly decline since August 2021.

“Views of current labor market conditions weakened. Consumers became pessimistic about future business conditions and less optimistic about future income. Pessimism about future employment prospects worsened and reached a 10-month high,” said Stephanie Guichard, senior economist for global indicators at The Conference Board.

“Average 12-month inflation expectations surged from 5.2% to 6% in February. This increase likely reflected a mix of factors, including sticky inflation but also the recent jump in prices of key household staples like eggs and the expected impact of tariffs,” Guichard said.



abcnews.go.com

Economists say Trump tariff threats, DOGE job cuts are 'chilling' the economy

Economists say uncertainty from Trump’s tariff threats and mass layoffs of government workers are starting to have a “chilling” effect on the U.S. economy.
abcnews.go.com abcnews.go.com
 
To analyze the accuracy of the article from ABC News titled "Economists say Trump tariff threats, DOGE job cuts are 'chilling' the economy," dated February 27, 2025, I’ll break it down into its key claims and assess them based on available evidence, economic principles, and context up to February 28, 2025.


The article focuses on the economic impacts of President Donald Trump’s tariff threats and the Department of Government Efficiency (DOGE) job cuts, citing economists and specific policy actions. Since I don’t have direct access to the full article text beyond what’s provided in search results, I’ll evaluate the summarized claims and cross-check them with known data and trends.


Key Claims and Analysis
  1. Claim: Uncertainty from Trump’s tariff threats and DOGE layoffs is “chilling” the U.S. economy.
    • Evidence and Context: The article quotes Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security (CNAS), saying, “It’s a very difficult business environment, because they can’t plan for what their cost structure is going to be,” and that this uncertainty is causing some to hold back on investments. This aligns with economic theory: uncertainty often delays investment and hiring as businesses wait for clarity on costs and demand. Trump’s tariff threats—10% on Chinese imports already imposed, with additional 10% plus 25% on Canada and Mexico planned for March 4, 2025, alongside “reciprocal tariffs”—introduce unpredictability in trade costs. Historical precedent, like the 2018-2019 U.S.-China trade war, showed tariffs increased consumer prices and slowed business investment, supporting the "chilling" narrative. DOGE’s federal job cuts, tied to Elon Musk’s efficiency push, reportedly involve tens of thousands of layoffs (e.g., over 26,000 firings plus 75,000 buyouts), per sources like CNBC and Piper Sandler. Economists note this could reduce consumption if workers lose income or save more out of fear, a classic multiplier effect. However, the scale’s economic impact is debated—26,000 jobs is significant locally (e.g., D.C.), but minor in a 160-million-person U.S. workforce.
    • Accuracy: Plausible and supported by economic logic and early data. The term “chilling” is subjective but reflects measurable hesitancy in investment and spending. No hard data (e.g., GDP forecasts) is cited to quantify the effect as of February 28, 2025, making it speculative but reasonable.

Claim: Tariffs on Canada and Mexico (25%) and China (additional 10%) could raise prices at grocery stores, gas pumps, and for cars.
  • Evidence and Context: Canada and Mexico are the U.S.’s top trading partners, supplying oil, auto parts, and food (e.g., 60% of U.S. vegetable imports from Mexico). A 25% tariff would likely increase costs for these goods, as importers pass tariffs onto consumers—studies from the 2018 tariffs showed a 10-20% price hike on affected goods. Ziemba notes car costs could rise by “several thousand dollars” due to cross-border supply chains (e.g., a car part crossing multiple times could face cumulative tariffs). Gas prices could climb if Canadian oil imports (over 50% of U.S. crude imports) face duties. Grocery impacts depend on specific goods but are plausible given Mexico’s role in perishables.
  • Accuracy: Highly accurate. Economic models and past tariff episodes back this. The article doesn’t overstate by claiming precise figures absent data, and the cited examples align with trade realities.

Claim: DOGE layoffs impact consumption as people lose jobs or fear job loss, leading to more saving.

  • Evidence and Context: Ziemba ties DOGE cuts to reduced consumption, a standard Keynesian view: lost income cuts spending, and uncertainty boosts precautionary saving. CNBC reports suggest 100,000–200,000 federal jobs may be affected, though only 26,000 firings are confirmed by February 28, 2025. Federal workers, often in high-cost areas like D.C., spend significantly; layoffs could dent local economies. Consumer confidence data isn’t cited, but early 2025 trends (e.g., inflation expectations rising from 5.2% to 6% per the article) suggest unease, possibly tariff-driven, reinforcing saving behavior.
  • Accuracy: Reasonable but lacks specifics. The causal link is sound, but the article doesn’t quantify the consumption drop or cite surveys showing increased saving, making it anecdotal yet credible.

Claim: Inflation expectations rose from 5.2% to 6% in February 2025, partly due to tariffs and price jumps in staples like eggs.
  • Evidence and Context: The article attributes this to “sticky inflation,” egg price spikes, and tariff expectations. Egg prices have fluctuated historically (e.g., 2022 bird flu drove them up 50%), and early 2025 could see similar supply shocks. Tariffs on Canada/Mexico could amplify this for imported goods. Consumer inflation expectations, per surveys like the New York Fed’s, often react to visible price changes and policy news. A jump from 5.2% to 6% is notable but not extreme, fitting a scenario of tariff uncertainty.
  • Accuracy: Plausible but unverified. No source (e.g., Fed survey) is named, and “sticky inflation” is vague without CPI data. The egg example feels specific yet unsupported here, though tariffs could logically push expectations up.


Broader Context and Critical Examination
  • CNAS and Ziemba: CNAS’s funding (e.g., defense contractors, foundations) and Democratic ties could bias its fellows toward critiquing Trump policies, but Ziemba’s points are standard economic reasoning, not overtly partisan. Her affiliation adds credibility via expertise, not agenda.
  • Timing: At February 28, 2025, tariffs beyond the initial 10% on China are threats, not enacted (set for March 4). Effects are thus anticipatory, not realized, which the article acknowledges by emphasizing “uncertainty.”
  • Counterpoints: Some economists argue tariffs could boost domestic jobs (e.g., steel), and DOGE cuts might streamline government without tanking the economy. The article doesn’t explore this, leaning negative, but its focus matches the cited expert views.


Conclusion


The article’s accuracy holds up well based on economic principles, trade data, and reported policy actions as of February 28, 2025.

Claims about price hikes, consumption drops, and uncertainty are grounded in evidence and expert opinion, though some (e.g., inflation expectations, saving behavior) lack hard numbers or sources, making them provisional. It’s not alarmist—tariffs and layoffs could indeed “chill” growth—but it’s early to call the full impact without post-March data. The narrative aligns with establishment economics but isn’t contradicted by available facts, earning a solid rating for accuracy with a caveat for its speculative edge.



@Grok
 
Economists for the most part are abject idiots. What kind of a career is that? Punxsutawney Phil has a better record than these people.
 
Cypress said:

Economists say Trump tariff threats, DOGE job cuts are 'chilling' the economy​

Economists say the uncertainty from President Donald Trump’s tariff threats and mass layoffs of government workers are starting to have a “chilling” effect on the U.S. economy.

“It’s a very difficult business environment, because they can’t plan for what their cost structure is going to be,” said Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security. “It’s adding to investment uncertainty, and some people are holding back on investments.”

Trump has so far imposed 10% tariffs on Chinese imports and says he’ll impose additional 10%, plus 25% tariffs on Canada and Mexico on March 4. Trump also says he will impose “reciprocal tariffs” that match the duties other countries levy on the U.S. That comes on top of tariff plans on cars, semiconductors, steel and aluminum. Even if Trump doesn’t ultimately move forward with all his tariff threats, the mere uncertainty has a chilling effect.

Meanwhile, the Department of Government Efficiency’s slashing of the federal workforce across the country “also impacts consumption, because people are losing their jobs or are afraid of losing their jobs, so that might cause them to save more money,“ Ziemba said.

This week, The Conference Board’s consumer sentiment survey found that it registered the largest monthly decline since August 2021.

“Views of current labor market conditions weakened. Consumers became pessimistic about future business conditions and less optimistic about future income. Pessimism about future employment prospects worsened and reached a 10-month high,” said Stephanie Guichard, senior economist for global indicators at The Conference Board.

“Average 12-month inflation expectations surged from 5.2% to 6% in February. This increase likely reflected a mix of factors, including sticky inflation but also the recent jump in prices of key household staples like eggs and the expected impact of tariffs,” Guichard said.



abcnews.go.com

Economists say Trump tariff threats, DOGE job cuts are 'chilling' the economy

Economists say uncertainty from Trump’s tariff threats and mass layoffs of government workers are starting to have a “chilling” effect on the U.S. economy.
abcnews.go.com abcnews.go.com
Click to expand...
BUT it is all the DEMs fault don't you know that by now?
 
Tbird19482 said:
Well seeing the independents didn't run anybody I know why.
Click to expand...


Two dozen independent candidates ran for president in the 2024 United States presidential election.

In total, 24 candidates appeared on presidential election ballots across the country, including independents and third-party nominees. While none of the independent candidates secured enough electoral votes to win, their presence added complexity to the race, which was ultimately won by Donald Trump (Republican) over Kamala Harris (Democrat). Third-party and independent candidates collectively received 2.13% of the popular vote, totaling over three million votes.


@Grok
 
Tbird19482 said:
And this is the SECOND time he was given a growing economy and he fucked the last one up too.
Click to expand...


Is that so?

Before the COVID-19 pandemic hit in early 2020, the U.S. economy under Trump showed strengths in some areas. GDP growth averaged 2.5% annually from 2017 to 2019, according to Bureau of Economic Analysis (BEA) figures—solid but not exceptional compared to the post-World War II average of 3.1%.

Unemployment fell to a 50-year low of 3.5% by February 2020, per Bureau of Labor Statistics.

The stock market, as measured by the S&P 500, rose 67% from Trump’s inauguration to its pre-COVID peak in February 2020.

Tax cuts from the 2017 Tax Cuts and Jobs Act boosted corporate profits and consumer spending, which grew from $19.9 trillion in January 2017 to $27.7 trillion by January 2021 (U.S. Treasury data).

COVID Impact (2020): The pandemic drastically altered the trajectory.

In Q2 2020, GDP contracted by an annualized 31.2%—the steepest drop since records began in 1947 (BEA).

Unemployment spiked to 14.8% in April 2020, erasing years of gains. Trump’s administration responded with the CARES Act, injecting $2.2 trillion into the economy via stimulus checks and business loans, which mitigated some damage; GDP rebounded by 33.8% in Q3 2020.

Longer-Term Metrics: By January 2021, the economy had not fully recovered to pre-COVID levels: unemployment was 6.3%, and GDP remained below its 2019 peak. The national debt rose by about 39% during his term, partly due to tax cuts and emergency spending. Wage growth for average workers was modest—real median household income rose from $67,500 in 2016 to $68,700 in 2019 (U.S. Census).


@Grok
 
Phantasmal said:
Federal employees don’t know their futures, small businesses don’t know whether to expand, people aren’t buying up, there’s a lot of uncertainty and fear. People aren’t spending. Trump creates instability.
Click to expand...


Are you scared, imbecile?
 
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