Businesses and scholars warn that Trump's shifting trade policies and tariff threats are creating uncertainty, causing a slowdown across multiple industries both domestically and internationally.

BEIJING, March 12 (Xinhua) -- The term "Trumpcession" has of late emerged to describe a potential recession triggered by U.S. President Donald Trump's unpredictable trade and economic policies. It has gained traction as key U.S. economic indicators show concerning trends, fueling growing apprehension among economists and investors.

WHAT IS TRUMPCESSION?

Amid growing worries, even Trump, who promised to "bring wealth back to America," acknowledged during a Fox News interview on Sunday that "there is a period of transition."

Recent economic forecasts have demonstrated such concerns. On March 6, the Federal Reserve Bank of Atlanta's GDPNow tool predicted a 2.4 percent contraction in gross domestic product for the first quarter of 2025, a significant downgrade from its late February projection of 1.5 percent negative growth.

Consumer confidence has also taken a hit. According to the latest data from the Conference Board, an independent U.S. think tank, the consumer confidence index dropped to 98.3 in February, the largest monthly decline since August 2021. Middle-income earners have been particularly affected, with rising inflation expectations and job security concerns weighing heavily on their outlook.

The job market is showing signs of strain as well. A report by outplacement firm Challenger, Gray & Christmas revealed that U.S. employers announced 172,017 job cuts in February -- a staggering 245 percent increase from the previous month and the highest monthly total since July 2020. Major factors that lead to the surge include actions of the Department of Government Efficiency, which contributed to over one-third of the job cuts, and fear of trade wars, said the report.

The stock market has not been spared. The S&P 500 has fallen nearly 10 percent from its February peak, wiping out over 4 trillion U.S. dollars in market value and erasing all gains made since the November election. On Monday, the tech-heavy Nasdaq dropped 4 percent, marking its worst day since September 2022.

TARIFFS AND UNCERTAINTY

At a Tuesday meeting with around 100 chief executive officers, Trump defended his trade policies, claiming that "the tariffs are having a tremendously positive impact." His remarks came in response to concerns from the business community, which has warned that prolonged tariffs could impose serious costs on American families, farmers and manufacturing.

Despite Trump's assurances, economists remain skeptical about the policy's effectiveness. Mark Zandi, chief economist at Moody's Analytics, pointed out that key economic indicators, including retail sales, manufacturing output, consumer spending, home sales and consumer confidence, have all shown significant declines in recent months, which he attributed to "haphazard economic policymaking" in Washington.

Market strategy consultant Irwin Stelzer expressed similar concerns, stating there's "little doubt" that Trump's tariffs will drive prices upward. "By how much and for how long, we do not know -- neither does Trump -- but up is the direction."

The administration's tariff policy has shown remarkable volatility, often with flip-flops within weeks, even days.

"This adds up to uncertainty that keeps investors on tenterhooks, with delete keys in easy reach as they study staff lists and expansion plans," said Stelzer.

It remains unclear which tariffs will ultimately be imposed and how long they will last, noted Nancy Vanden Houten, the chief U.S. economist at Oxford Economics. However, the uncertainty itself also impacts economic activity, making businesses more reluctant to invest in new projects or hire additional employees, she said.

WHAT'S NEXT?

Businesses and scholars warn that Trump's shifting trade policies and tariff threats are creating uncertainty, causing a slowdown across multiple industries both domestically and internationally.

The ripple effects are being felt across various sectors. Delta Air Lines CEO Ed Bastian reported that declining consumer confidence is reducing travel demand, while noting weakness in several key industries, including automotive, technology, media, and aerospace and defense.

The manufacturing sector faces particular challenges. The U.S. automotive industry, which accounts for 2.5 percent of its economy, relies heavily on supply chains from Canada and Mexico. The Budget Lab at Yale University said the latest tariffs imposed by the Trump administration and retaliatory tariffs from other countries will lead to a long-term GDP decline of 0.4 percent, equivalent to an annual loss of 80 billion to 100 billion dollars.

"The economic impact of a sustained 25 percent tariff on Canada and Mexico would be severe, with full tit-for-tat retaliation likely to push Canada and Mexico into a recession and the U.S. to a point of stagnant growth," Andrew Foran of TD Economics wrote.

The global implications are equally concerning. Mahmood Pradhan, head of Global Macro at Amundi Investment Institute, warned that tariffs are more likely to reduce consumption and suppress demand, ultimately slowing economic growth not just in the United States but also worldwide.

In Europe, the threat of tariffs could lead "households and companies to postpone their decisions over spending and investment, which will contribute to slowing down the growth of GDP," said Angel Gavilan, director of economy at the Bank of Spain, highlighting the "uncertain and complex" global situation due to the U.S. tariffs.