Trump’s First Economic Quarter

After reflecting upon how Donald Trump spent his 100th day in office, it is worth considering the economic data that coincided with this political milestone. The day after Trump spoke with ABC News and attended a rally in Michigan, a series of economic results were published reflecting the state of markets during the first quarter of 2025. The Trump administration only took office on January 20, so the extent to which it could truly be held entirely accountable for events during this quarter is debatable, however, that notwithstanding, the results made interesting reading, especially as they do not take into account the direct impact of the tariff policy that kicked in on April 2, the very start of Q2.

Although the tariffs had not been introduced, they had been anticipated, leading to bulk buying of foreign goods in a concerted attempt to get ahead of the anticipated announcement of Liberation Day. This was seen to have had a negative impact on the US balance of trade, which, when combined with concerns about an anticipated imminent increase in prices, and an attending negative impact on consumer spending, led to a 0.3% reduction in the nation’s GDP. This was in sharp contrast to the previous quarter that had seen a 2.4% increase in growth.

No matter how the Trump White House seeks to spin these numbers, they make for concerning reading. Economists warned of an impending recession for the duration of Joe Biden’s presidency. They warned that the market was overheated and of the need for a soft landing. The White House even attempted to change the definition of a recession when faced with a downturn in the market and rampant inflation. Regardless of whatever semantics the Biden administration engaged in, the economy is now 100% owned by Donald Trump and his ability to reinvigorate the quarterly figures will have a huge bearing on how his administration is perceived and on his party’s political standing ahead of next year’s all-important mid-term elections.

While there was a widespread belief that the economy would shrink in Q1 regardless of whoever prevailed in last year’s election, these figures will be seized upon by Democrats as evidence of what they see as being Donald Trump’s financial irresponsibility. The White House, meanwhile, will doubtless use them as further evidence of the need to cut interest rates and bring even greater public pressure on the chairman of the Federal Reserve, Jerome Powell, to do so quickly, and bring figures in line with those in Europe and the UK.

The state of the economy was at the heart of Donald Trump’s campaign for a second- non-consecutive term as president, and in many ways, things have taken an upturn since his election: Unemployment stands at 4.2%, inflation is at 2.4%, and the price of gasoline has fallen in most states. Prices are falling in stores, and the price of eggs is no longer a subject of national debate. The latest GDP figures, however, coupled with the introduction of tariffs, appears likely to have a negative impact on consumer spending, a vital component in the nation’s economic wellbeing. The American society is driven by consumption and if people stop spending the economy will grind to an almighty halt no matter how the stock market responds to the tariff policy.

The Trump administration recognizes that it is dealing with a very tight window of opportunity to implement sweeping economic reforms and is moving at breakneck speed to do so. The use of executive orders is being implemented to truncate the time taken by congress to agree upon anything, especially given the need to secure super-majorities in many cases, which is unrealistic in the current political climate. The White House maintains that the president is making good upon his campaign pledges, to address vital, long-term issues that have been overlooked by successive administrations to the detriment of the nation. These policies reflect Donald Trump’s long-held belief that the nation has routinely been taken advantage of by her international allies and adversaries, that its diplomats negotiate poorly and that the continuing trade deficit was damaging to the long-term interests of the United States.

The introduction of tariffs on what the Trump administration termed Liberation Day was designed to introduce shock and awe into world markets and force foreign nations to negotiate new bilateral trade agreements with the United States to enable great access to markets and generate vast revenues until that occurred. The policy has already witnessed promises of $7-8 trillion in inward investment by companies eager to avoid tariffs. Apple has likewise agreed to move its i-phone manufacturing from China to India, as nations begin the process of negotiating to reduce tariffs and secure trade deals.

The stock market has been seen to respond immediately as nations appear to fall in line. India, Japan, and South Korea appear likely to be in the first group of nations to agree terms with the White House, increasing the likelihood of other nations quickly following suite. The anticipation must be that Q3 will see the announcement of key bilateral agreements, allowing the White House to move into the new year with a series of economic victories under its belt with which to wage the vital mid-term elections. Make no mistake, there are very real political issues at stake in these economic decisions, and whilst the president’s opinion ratings appear to have taken a hit in some polls, the Democrats are in even worse shape.

The economy was key to Donald Trump’s election. It will also be key to his party’s ability to retain control of the congress, and thereby to Trump’s capacity to direct policy and avoid yet another effort to remove him from office. It is no exaggeration, therefore, to state that the White House is betting the midterm elections, and its own political survival, on the state of the national economy and its ability to recalibrate the global economic system in its favor.

Donald Trump’s (Second) First 100-Days

https://www.youtube.com/watch?v=C1dOCZbOA5Q

Remarkably enough we have already reached that first milestone in any presidency, the first 100-days. Technically, of course, this is Donald Trump’s second 100-days, but who’s counting? Whatever one makes of his administration, and the jury will doubtless remain stubbornly divided regardless of events, it has surely done more in its first 100 days than any other since the concept was first introduced during FDR’s first term.

Unlike eight years ago, when the Trump team had not anticipated winning the election, the current incarnation entered the White House with a clear plan of action, a series of initiatives to address, and a determination to prevail. Its ability to do so was aided by Republican victories across the country, ensuring that the Trump White House is dealing with receptive majorities in the Congress and the Senate. It appreciates, however, that time is short, that the Mid-term elections get closer every day, and that once they are out of the way all eyes will turn to the presidential election campaign of 2028. Hence the need to move fast….

President Trump marked his first 100 days in settings that may have appeared unlikely. He granted interviews not to Fox News, which would have been expected, but instead to The Atlantic and ABC News. Neither outlet has been supportive of his policies and their market audience will likely have been repelled by much of what he articulated. Regardless, it was an interesting stance to adopt, and one that was in stark contrast to approach adopted by his predecessor who spent much of his presidency being deliberately kept form the press by his family members and various acolytes. The ABC News interview was particularly intriguing considering that the network had only recently been forced to pay $15 million in a settlement having defamed Donald Trump. The ABC News employee at the heart of that incident, former Clinton aide George Stephanopoulos, was nowhere to be seen, with the interview being conducted instead by Terry Moran.

The interview was remarkably combative, and it would be hard to imagine Moran taking such a stance with either Barack Obama or Joe Biden. Indeed, the interview perfectly conveyed the results of a poll that revealed only 8% of media reporting on the administration was positive. This was encapsulated in Moran’s questioning on the state of illegal border crossings, which appear to have ground to a complete halt. Despite this, Moran chose instead to focus upon the methods adopted, rather than the results. The president touted the reduction in border crossings by some 98% as perhaps his most significant achievement, but in a move that reflected not only media coverage but also the position adopted by Democrats across the country, Moran demonstrated far more sympathy for the plight of deported illegal immigrants than of American citizens and the communitas that have bene blighted by attending crime and drug abuse. Remarkably, the Trump White House finds itself blocked at every turn by Democratically appointed judges who take issue with his effort to deport illegal immigrants, despite having been appointed to the bench, in many cases, by Barack Obama who deported some 3 million such individuals during his eight years in office, or by Joe Biden who deported them at a far faster rate than Donald Trump has managed this far. Michelle Obama has said that Trump’s deportation efforts “keep her awake at night” but she appeared to sleep just fine when her husband, The Deporter in Chief, was enacting the same policy during her eight years as First Lady.

Having spoken with ABC News the president departed for events in Michigan, hardly an obvious place for a Republican president to celebrate such an important milestone. However, Donald Trump carried the state in November 2024, along with the other key swing states, decimating Kamala Harris in the process and returning his to the White House. This, then, was a chance to thank the electorate and take a victory lap in a state that is also the traditional home of the American car industry, which Donald Trump is aiming to rebuild by repatriating the manufacturing industries lost over the past several decades of globalization.

Michigan is also home to Gretchen Whitmer. As one of the nation’s most prominent Democrats, she should have figured strongly in efforts to replace Joe Biden and is an obvious candidate for the party’s nomination in 2028. As governor she could not avoid greeting Donald Trump and could certainly not avoid accompanying him to Selfridge Air National Guard Base, which had been at risk of closure, but has now been saved due to her work with the White House. In a move reminiscent of Barack Obama’s engagement with Governor Chris Christie in the aftermath of Super Storm Sandy in 2012, President Trump lavished praise on Governor Whitmer and invited her to the podium to say a few words. The backlash from her own party has already begun, just as Trump will no doubt have anticipated…

Amazon’s Tariff Climb Down

Today has seen a classic example of how the Trump administration’s rapid response to events can bring about rapid change. Speaking at the White House during a briefing to mark the Trump administration’s 100th day in office press secretary Karoline Leavitt tore into plans that Amazon was preparing to provide customers with the cost of Trump’s tariffs next to the price of products on its website. “This is hostile and political act,” she insisted, adding further, “Why didn’t Amazon do this when the Biden administration hiked inflation to the highest level in 40 years?” Despite the concern, she declared that the anticipated move by Amazon was “not a surprise,” highlighting a 2021 report in Reuters that noted how Amazon had “partnered with a China propaganda arm.” This, Leavitt insisted, was “another reason why Americans should buy American.” The incident then prompted a direct phone call from the president to Amazon owner, Jeff Bezos, a move that led to a swift retraction by the company. In a statement provided to The Washington Post, also owned by Bezos, Amazon announced that “The team that runs our ultra low cost Amazon Haul store has considered listing import charges on certain products. This was never a consideration for the main Amazon site and nothing has been implemented on any Amazon properties.”

So. Job done, story over. What transpired today appears to have been a concerted effort by the White House to get ahead of the story and prevent Amazon from ever implementing this pricing policy by shaming the company into acquiescence. By bringing in comparisons to the inflation that occurred under the previous administration, the Trump White House has cornered Amazon into an apparent submission by not wishing to be seen as favoring one party over another. It is, of course, interesting, that the Amazon denial of this policy was issued by the Washington Post, a publication also owned by Jeff Bezos, which has itself been the focus of Donald Trump’s ire due to its reporting and inclination to favor Democratic candidates and policies.

The suggestion that Amazon planned to reveal any price increases that were due to increased tariffs also carried with it the all too obvious risk that Amazon would be revealing just how many of its goods were imported, which could well have led to a backlash at a time when there is a concerted effort to repatriate manufacturing and to get Americans to buy goods that are made domestically when possible. In light of what appears to be an immediate move by Amazon to refute this story, and the willingness of the Trump administration to be so quick to get ahead of the story, other companies may well be forced to think twice before considering any effort to include any line item detailing the impact of the tariffs.

The tariff strategy has so far not hindered the Trump administration’s dealings with tech companies, and has, instead, been a driving force behind several high-profile decisions to repatriate manufacturing to the United States, or, in the case of Apple, away from China. It has also announced that companies who repatriate will be able to off-set the costs involved, as Treasury Secretary Bessent has emerged as perhaps the most critical member of the administration in such matters.

If the tariffs begin to impact the cost of production, then it is likely that those overheads will eventually be passed on to the consumer, especially by smaller firms who cannot afford to merely assume such increases. Much will depend upon the ability of the UK government to strike a deal with the United States in the coming weeks and months to prevent this from happening. The tariffs themselves are designed to do just this: drive foreign nations to the negotiating table to agree new, bilateral agreements with the United States and end what the Trump administration sees as a system that has penalized US exports, driven manufacturing jobs overseas, and led to the rapid rise of China as a world economic power.

The tariffs are part of a multi-pronged policy, designed to address a systemic problem with the US economy that has seen real wages fall for decades, along with the standard of living, causing people to be working harder for less. The White House strategy is to cut a trillion dollars from the federal deficit by reducing government waste and over-employment, to make permanent the tax cuts it introduced in its first term, eliminate taxes for those earning under $200k, and eliminate taxes on tips and overtime. This is being done in a series of Executive Orders and forms the central component of the budget that is currently making its way through Congress.

The incident should be viewed ominously by Kier Starmer’s government in London, which really does need to get a much firmer grip on its policies and its messaging. It does itself no favors to be forecasting a trade deal with the EU at the exact time that the Chancellor is in Washington seeking to assure the White House of the priority that Downing Street places on securing a new bilateral trans-Atlantic trade agreement.