On Tuesday, Donald Trump told the rooms full of executives that he felt a “renewed spirit” dedicated to the American corporate world because businesses release hundreds of billions of investment. “Tariffs,” the president added at a meeting of a business round table, “they have an extremely positive impact.”
When he spoke, the stock markets released a very different verdict. The S&P 500 index closed by 0.8 percent on that day and continued to descend in the coming days before the reflection on Friday. The index lost 4 % since the beginning of 2025.
The trust was shaken by twists in the aggressive and unpredictable White House's business policy, along with the concerns that the shaken of federal government machines would grow.
It is far from the prevailing mood at the beginning of this year, when Trump's faith that the spirit of corporate animals would release deregulation, tax cuts and hacking by many US executives.
IN January, meetings At the World Economic Forum in Davos in Switzerland, we were talking about American dominance over sclerotic Europe and stagnant China. “It's five minutes from midnight for Europe,” said the best manager of the bank at that time, adding, “Everyone is in America all-in”.
This enthusiastic mood was grossly broken by Trump's first weeks in the office. Confused volatility of the creation of the President's policy – as Tariffs They are endangered, downloaded, grows up and then dial back – increases company uncertainty, suppresses sentiment and encourages warning about recession.
“In Davos, all Glib bankers called time to the side, here we go, deregulation, low taxes, boom of mergers and acquisitions, boom IPO,” says the CEO of a global investor with a management of $ 200 billion. “That completely returned to their faces.”
The estimated slowdown is remarkable in the fact that it is largely caused by the wound caused Own Policy of AdministrationEconomists say, rather than the result of external shocks such as energy overvoltage, war, pandemic or banking implice.
While Trump explained abundantly during his election campaign that he wanted to double his first term of office, his policies proved to be much more extensive and aggressive than most analysts expected.
Trump's decision to come out when he blocked the three most important business partners of America – Canada, Mexico and China – with the punishment of tariffs during his first two months with incorrect investors.
The first Trump administration imposed in 2018 and 2019 fees for imports worth approximately $ 380 billion. The new tariffs affect $ 1.4 import, estimated to think-tank the foundation that increases to $ 1.4, provided the exceptions covering some goods and Mexico expire, as shown on April 2.
Corporations say there is a lack of clarity about what tariffs are to achieve – is it a higher federal income or rewinding production to the US or specific objectives such as reducing drug trafficking or illegal migration? That made it difficult for them to shape plans.
This results in increasing business uncertainty and delays of investment decisions, which harms growth. Policy Uncertainty Index among smaller businesses assembled NfibA non -profit organization, which represents small businesses, because in the early 70th years is now approaching a record maximum.
American companies relying on the import of medium goods will be affected by higher costs, while US households could find their budgets. There is another blow because US exporters are affected by retaliation tariffs by American business partners such as Canada, EU and China.
“Everyone started the bull, but due to his creation of politics, which was at best unpredictable, people say it is not Trump 1.0,” says Davide Serra, founder and CEO of investment company Algebris Investments. “There is nothing special for me.” It looks like a circus. ”
The disturbance that Elon Musk and its envoys caused to the so -called Ministry of Government Efficiency (DOGE), which chaired the suspension or release of tens of thousands of workers and the abolition of thousands of government grants and contracts, contribute to the harsh impact of trade policy.
Muska's actions caused cracks within the Republican Party, created extensive uncertainty within the federal workforce and anger in parts of the population. Two federal judges on Thursday Ordered Trump's administration, which has released tens of thousands of government employees in recent weeks, in a legal failure to manage the costs of Muska.
While investors have begun to take care of the danger of recession in the US, the predictions of Wall Street are not yet ready to give up the spirit. The latest survey of the consequences of the consensual economy still points to growing by 2 % this year – from prediction 2.2 % a month and 2.7 % of the IMF forecast released only in January.
This is still above 1 % of the GRIF growth forecast for the euro area. While the Federal Bank of GDP in Atlanta points out the contraction of the first quarter, it was heavily distorted by business data that are affected by a large import of gold.
Scott Bessnt, Secretary of the Treasury, has played market volatility and claimed that symptoms of slower growth are an essential part of the “detoxification period” in which the country's economy becomes less dependent on public expenditure.
Some investors are willing to give administration an advantage of doubt. “The US will be better for the long time,” says Joseph Ama, President and Chief Investment Director of Shares in New York based in New York Neuberger Berman. “I don't think 25 percent of GDP flowing through the government is healthy for any economy.”
However, it recognizes disruption from business policy. “The speed and range of the proposed tariffs were tearing on the market. Animal spii have encountered reality: it is much easier to reduce expenses than it is to control growth. ”
The head of the American society is They are played by the idea that tariffs are made to build up domestic capacity – despite the president's aspirations.
The toymaker Mattel, based in California, comes around half of his US sales, but Ynon Kreiz, CEO, says tariffs are not enough to produce there.
Despite the efforts of society over the past six years, this has been diversified by its production base – by 2027, no country has provided more than a quarter of its production of Barbie dolls, hot bikes and other toys.
“These are general considerations about costs,” Kreiz says in an interview. “We do not see the economy of product production in relation to other countries.”
Kreiz attended a meeting with Trump in Washington this week, says the transfer of Mattel's production points was one of the ways to compensate tariffs, but another is raise for customers. “Finally, when it comes to impact on tariff, we will make prices to ease for where we have to do it,” he says.
Musk's manufacturer of electric cars Tesla warned In a letter to the US sales representative Jamieson Greer that the trade war could make him a goal for retaliatory tariffs and increase the cost of making vehicles in America.
The prospect of rising prices as a result of the increase in tariffs begins to play consumers' minds. In March, the University of Michigan consumers' sentiment slipped to 57.9, a larger decline than economists expected. The index has now deleted all profits published as a result of Trump's election victory in November. “Many consumers quoted a high level of uncertainty about politics and other economic factors,” the scientists said.
Erica York, vice president of federal tax policy in the tax foundation, says the lack of clarifying strategy around Trump's widespread trade war hangs over the economy. “We hear conflicting goals from Trump's administration almost daily,” he says.
Trump says his taxes from Canadian and Mexican products are needed to force measures to trade in Fentanyl and, for example, undocumented immigration, but also wants tariffs to force industries like a car manufacturer to move to the US.
York estimates that fees will reduce the level of US GDP by 1 % by 1 percent by 1 % compared to previous forecasts. The way he adds is enough to erase any positive impact of expansion after the first tax cut Trump.
Given the prospect of ongoing chaos, investors are betting that they have offered a growth story in recent years, the US economy is now losing part of the gloss that has dazzled delegates in January. “For me, the consensus Davos has always been wrong, but this year I have never seen so many drugs for drugs,” says Serra from Algebris. “It was unreal.”
The transfer of American expectations restores interest in markets such as Europe, where investors believe that Trump's whim can block the block into action. They point to a sudden German shift towards investment in defense and infrastructure and hope that the EU can also respond by accelerating progress towards the long -term deepening of the unification of capital markets.
“Some of the initiatives received by the US administration can stimulate Europe to do some of the things she was talking about, but he didn't,” says Amato in Neuberger Berman. There is “awareness that Europe must manage growth and invest more in defense.”
Meanwhile, recent innovations in China have re -awakened questions about US technological superiority. Creation of a new AI model from start-up DeepseekComparable ability with the best models from American leaders, such as Openai, Anthropic and Meta, but trained for radically lower costs and the use of less sophisticated chips, has shares in highly award -winning technology companies. China is also planning a satellite constellation that could question the Muska System Starlink.
Decline in dollar So far, this year, along with the American property market inadequately performance, reflects a more pessimistic mood. On Friday afternoon, the US Index has fallen by 4.4 % since the beginning of 2025, compared to 7.7 % increase in Europe MSCI in the euro.
“People realize that American uniqueness may not be so exceptional,” said Vincent Mortier, the main investment director of the Amundi Group, the largest European asset manager. “It's a wake -up.”
Data visualization Ray Douglas and Keith Fray