The flip-flops of the President of the United States on the increase in customs duties plunge investors and consumers in uncertainty and cause the doubt of a possible recession.
Donald Trump’s reversals are dizzying the American economy. Consumers, investors and financial markets have been bathed in uncertainty since its return to the White House and the launch of a trade war with its historic partners. After announcing 50% of customs duties on Canadian steel and aluminum on Tuesday, March 11, the American president backlit the same day, before announcing a tax on these products up to 25% the next day. “This sawing policy is not good for businessSlice economist Maria Demertzis from the Conference Board reflection center in Europe. Economic actors must be fixed in order to be able to organize. “
The New York Stock Exchange sounded the alert on Monday. The American index Dow Jones – the equivalent of the CAC 40 French – contracted by 2.08%, while the Nasdaq, which represents technological values, unscrewed by 4%. The price of the car manufacturer Tesla thus dropped by 15%, to which Donald Trump reacted by promising to buy a new car from this brand, in support of his faithful right arm Elon Musk, boss of the company. As for the S&P 500, which represents the 500 largest companies listed on American scholarships, it fell 2.70%.
The business community, which was based on favorable measures in terms of taxation and regulations promised by Donald Trump, has disillusioned. “The markets suffer from a good old fear of growth due to a strong volatility of American policy”Summary Mohamed El-Erian, president of Queens College de Cambridge (United Kingdom), in the Financial timeWhile European and Asian indices also fell back on Monday.
With customs tariffs on imports in the United States, imposed among others on the European Union, Mexico and Japan since Wednesday, Donald Trump hopes “Reindustrialize the country and encourage foreign companies to produce on American territory”explains the economist Patrick Artus in The world. A logic that could turn against him. “Increasing customs duties is raising prices for productsunderlines Véronique Rich-Flores, independent economist. This will have an impact on consumption and on companies that decide to take their margins, but would lose profitability. “
“Protectionism involves more inflation.”
Véronique Rich-Flores, economistin franceinfo
Especially since Washington attacks its three main business partners – Canada, Mexico and China – in terms of imports, as shown by the data combined by the New York Times. “You could say that we are going to go to domestic products to compensate, but it is not certain that there is an alternative to all imported goods”Pointe Urszula Szczerbowicz, economy teacher at the Skema Business School. “THE Inflationist shock to which we head and the job cuts in the administration, accompanied by declines in social spending, are all the elements that can push the economy into recession “Summarizes Véronique Rich-Flores.
However, the latest inflation figures in the United States, published Wednesday by the Ministry of Labor, were better than waiting. The consumer price index increased by 2.8% in February over a year, compared to 3% in January. It is beyond 2% targeted by the American central bankBut stable since the exit of the inflationary thrust caused by the COVVI-19 crisis. “Consumer prices have not been affected so far” By the first salvo of surcharge on Chinese products, notes the Pantheon Macroeconomics Study Center, quoted by AFP.
The fact remains that the measure only entered into force on February 10 and that companies had made stocks in anticipation, bringing the American commercial challenge to a record via massive imports, reports the Financial time. And the London Stock Exchange Group, a market provider on the markets, provides an average inflation of 3.2% in the first quarter of 2025, which would only descend from the last of the year, according to a document transmitted to Franceinfo.
Uncertainty also reaches consumer confidence, according to the index calculated by the Conference committeereference to the United States. In February, it was 98.3 points, down for the second consecutive month. But according to theOECD,, “Values less than 100 indicate a pessimistic attitude as to the future evolution of the economy, which can result in a tendency to save more and consume less”.
Stéphanie Guichard, economist at Conference Board, explains that “Mentions relating to trade and customs duties have increased sharply” in the responses of the respondents, “reaching an unrivaled level since 2019”. Moreover, “The answers were dominated by comments on the administration in place and its policies”. Households are also concerned with a possible recession over the next twelve months: the share of those surveyed by the Conference Board expressing this opinion has reached an unequaled level since last May.
Without going so far as to cause a recession, “The slowdown in the growth of the US economy could come from the drop in investments”Estem Urszula szczerbowicz. For the time being, the back and forth policy of Donald Trump and the economic uncertainty that it generates pushes investors “To choose the ‘Wait and See'”,, Explain experts from the Banque de France, under the cover of anonymity, in Franceinfo. In other words: they choose to break their investments while waiting to be fixed on the economic direction that the world’s leading power will ultimately take. “If the customs duties policy was frozen, uncertainty about investment would be less, because companies could prepare to find substitutes for products that would be inexorably taxed”Confirms Urszula Szczerbowicz.
How does Washington react to all these fears? “In general, if the economy begins to deteriorate, we can count on the aid of the government, via budgetary recovery measures and reduction in Fed interest rates (United States Federal Reserve)To amortize the impact “underlines the economic media Axios. “But officials of the Trump administration seem ready to tolerate certain economic disturbances as a price to pay for their ambitious political program.” It is in any case in this sense that the American president went on Sunday. Questioned by Fox News On the risk of recession, he replied: “I hate predicting this kind of thing”assuming “A transition period”.
However, there is an air of deja vu: Donald Trump had imposed customs tariffs on his partners during his first mandate. “But they were more targeted in terms of sectors and countries. They are now much wider and concerning more states”support experts from the Banque de France. Customs duties on European aluminum, for example, amounted to 10% at the time, compared to 25% today. But it remains to be seen if they will remain so. The institution’s experts assure him: “The indicators of uncertainties concerning commercial policy are at the highest historical.”
