How did the American economy lose an indomitable Hala

Donald Trump told a room full of executives on Tuesday that he senses a “renewable spirit” wandering in the world of American companies, as companies launch hundreds of billions of investment. The president added at a round -timer meeting for business, “Customs tariffs”, has a very positive impact.

During his speech, stock markets were providing a completely different rule. The S& P 500 index closed by 0.8 per cent that day and the fall continued in the following days before the recovery on Friday. The index has lost 4 percent since the beginning of 2025.

Confidence has been shaken by the unexpected and unpredictable trade policy in the White House, as well as fears that federal government machines will fall behind will disappear.

It is far from the prevailing mood of this year, when Trump believes that the lives of animals will be launched due to the cancellation of executive restrictions, the tax cuts and bureaucracy were widely shared by many American executives.

in January, meetings At the World Economic Forum in Davos, Switzerland, preparation with American hegemony over the hardening and stagnant China. “Five minutes over the middle of the night to Europe,” said one of the major executives of the bank, adding, “Everyone in America.”

This hateful mood was rude in the first weeks of Trump in his post. Performed volatility to treat the president’s policies – such as Definitions Threatened, withdrawn, retreated, then retreated again – raises uncertainty in companies, relieve feelings, and pushing stagnation warnings.

“In Davos, all bankers who say the party time, here we go, cancel the restrictions, low taxes, the boom of integration and purchase, the public subscription boom,” says the CEO of the global investor who owns $ 200 billion of assets under management. “This has led to completely opposite results in their faces.”

The expected slowdown is noticeable in that it is largely a self -wound paid Private management policiesEconomists say, instead of the result of external shocks such as high energy prices, war, epidemics, or banking collapses.

While Trump explained that during his election campaign he wanted to double commercial wars in his first term, his policies have proven to be more aggressive and aggressive than most analysts expected.

Trump’s decision to go out as he wanders around the three most important commercial partners in America – Canada, Mexico and China – with a punishing tariff during the first two months of investors who have sinned badly.

The Trump administration has imposed fees on imports valued at about $ 380 billion in 2018 and 2019. The new customs tariff affects imports of one dollar value, and it is estimated that the tax thought institution, which rises to 1.4 trillion dollars, assumes exemptions covering some goods from Canada and Mexico on April 2, as shown at the beginning.

Companies say there is a lack of clarity over what the definitions aim to achieve – are they higher federal revenues, production of production to the United States, or specific goals such as limiting drug trafficking or illegal immigration? This has made it more difficult for them to make plans.

This results in the high uncertainty in business and delay in investment decisions, which will harm growth. The index of uncertainty in politics between the smaller companies that they collected NFIBA non -profit institution that represents small companies, since the early 1970s, is now close to record levels.

American companies that rely on the imports of intermediate goods will reach higher costs, while American families can find winged budgets. There is another upcoming blow, as American exporters are exposed to a retaliatory tariff by American commercial partners such as Canada, the European Union and China.

“Everyone began upward, but given the policy -making, which was not regularly, people say perhaps this is not Trump 1.0,” says David Sera, founder and CEO of the island investment companies. “For me, there is nothing exceptional about the United States. It looks like a circus.”

In addition to the impact of commercial policy is the turmoil caused by Elon Musk and its envoys in the so -called Ministry of Governmental efficiency (DOGE), which chaired a comment or rejected tens of thousands of workers and cancel thousands of grants and government contracts.

Musk’s actions led to the appearance of a crack within the Republican Party, creating uncertainty on a large scale within the workforce and federal anger in the sections of the population. Thursday two federal judges I command The Trump administration has been dismissed to rehabilitate tens of thousands of government employees in recent weeks, in a legal setback to the MUSK costs.

While investors began to feel anxious about the danger of American recession, the experts of the Wall Street are not ready to give up the ghost yet. The most recent survey of predictors by consensus economies indicate 2 percent this year – a decrease from 2.2 percent a month ago and the expectations of the International Monetary Fund at 2.7 percent issued recently in January.

This is still much higher than growth expectations by 1 percent by the International Monetary Fund for the euro. While the GDP of the Federal Reserve in Atlanta indicates a shrinkage in the first quarter, this has been greatly distorted through trade data that is affected by the gold board on a large scale.

Scott Bessin, Minister of Treasury, reduced market fluctuations and argued that the signs of slow growth are a necessary part of the “period of toxins disposal” in which the country’s economy becomes less dependent on public spending.

Some investors are ready to give management the benefit of doubt. “In the long run, the United States will be better at that time,” says Joseph Amato, the president and the chief investment of stock investment in Neberger Berman. “I don’t think 25 percent of GDP is flowing through the government is in good health for any economy.”

But he recognizes the disturbance of commercial policy. “The speed and scope of the proposed definitions have defeated the market. Animal lives were met with reality: it is much easier to reduce spending more than growth.”

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The leading American companies The idea that the customs tariff will lead them to build local ability – despite the aspirations of the president.

The California -based games maker derives about half of its sales from the United States, but Ynon Kreiz, the CEO, says the definitions are not enough for manufacturing there.

This is despite the company’s efforts over the past six years to diversify its manufacturing base – by 2027, no one country will provide more than a quarter of its production of Barbie dolls, hot wheel cars and other games.

“It comes to total cost considerations,” Creies says in an interview. “We do not see the economies of products making in the United States, for other countries.”

Kreiz, who attended a meeting of the round table for this week with Trump in Washington, says that the transfer of manufacturing sites in Mattel around him was one of the ways to compensate for the definitions, but there is another it is Price up For customers. “In the end, when it comes to the effects of customs tariffs, we will take prices to reduce this as we need to do so,” he says.

For me, Davos consensus is always wrong, but I haven’t seen this year the people of the United States a lot on drugs. It was surreal

Electric car maker in musk Tesla to caution In a message to the American commercial actor, Jarison Jarir that the trade war can make it a target of revenge definitions and the increase in the cost of making vehicles in America.

The possibility of high prices as a result of increased customs tariffs is to start consumer minds. The Michigan Consumer Morals Index slimed 11 percent in March to 57.9, a greater decrease than economists. The index now wiped all the gains published in the wake of Trump’s electoral victory in November. “Many consumers have pointed out a high level of uncertainty about politics and other economic factors,” the researchers pointed out.

Erika York, Vice -President of Federal Tax Policy at the Tax Corporation, says that the lack of a clarification strategy about Trump’s intermediate war is related to the economy. “We hear conflicting goals from the Trump administration on a daily basis,” she says.

Trump says that his strikes on Canadian and Mexican products are necessary to force to take action on the trafficking in Fntanil and the undocumented migration, for example, but he also wants to force the customs tariffs industries such as automatic transition to the United States, and to raise huge amounts of federal revenues to help compensate for the impact on tax supplies.

York estimates that the fees will, as avenged by American partners, will reduce the level of GDP in the United States by 1 percent compared to previous predictions. She adds that it is sufficient to eliminate any positive effect from extensions to tax cuts in the first term of Trump.

Given the possibility of continuous chaos, investors are betting that after presenting a prominent growth story in recent years, the American economy now loses some shine who admired WeF in January. “For me, the consensus of Davos is always wrong, but I haven’t seen this year the people of the United States a lot on drugs,” says Sera from algebra. “It was surreal.”

American expectations that renew attention are renewed in markets like Europe, where investors believe that Trump’s terrifying may cry out at work. They refer to Germany’s sudden shift towards the investment that is increasingly deficit in defense and infrastructure, and they hope that the European Union will also respond by accelerating progress towards a long -awaited deepening to unify capital markets.

“Some of the initiatives taken by this American administration may motivate Europe to do some of the things it was talking about, but it did not.” There is “realization that Europe should push growth and investment more in defense.”

Meanwhile, the modern innovations in China have woke up questions about America’s technological excellence. The emergence of a new model for Amnesty International from the startup DibsicComparison to the ability to best models from US leaders such as Openai, Anthropic and Meta, but have been trained at a lower radical cost and the use of less developed chips, and has shook shares in high -value American technology companies. China also plans to satellite towers that can challenge the Musk’s Starlink.

Retreat dollar To date this year, along with the performance of the American stock market, reflects the moody mood. By Friday noon, the MSCI USA index fell by 4.4 percent since the beginning of 2025, compared to an increase of 7.7 percent in MSCI Europe in the euro.

“People realize that the American extraordinary may not be exceptional,” said Vincent Mortier, chief investment official in the Amundi Group, the largest asset manager in Europe. “It is an invitation to wake up.”

Imagine data by Ray Douglas and Keith Fry