[Increased Pressure, Trump Adjusts Economic Tune]

(The Hill) Trump has backtracked on economic messages as voters and Republican colleagues express growing concerns about his trade agenda.

For months, Trump had been confident in his plan to impose comprehensive tariffs, but now he acknowledges that the U.S. economy may suffer due to high import taxes.

The latest growth report released Wednesday dealt a new blow to Trump, with the first-quarter economy experiencing a significant decline, partly due to a surge in imports before the president's tariff policies were implemented.

Despite Trump and his senior economic officials emphasizing strong performance in other areas of the economy and downplaying the impact of tariffs, the president also tried to blame the economic downturn on former President Biden.

Trump admitted that tariffs could lead to higher prices and even shortages of goods, urging business leaders to be patient on Wednesday and acknowledging that American consumers might have to endure silently.

"Someone said, 'The shelves will be full of goods.' Well, maybe kids will have two dolls instead of 30, you know. And maybe these two dolls will cost a bit more than usual." He said at a cabinet meeting on Wednesday.

Trump's comments on tariffs contradict his previous views on their economic impact and go against his promise to lower prices after inflation reached a 40-year high.

"Tariffs do not cause inflation; they bring success." Earlier this year, Trump said when announcing 25% tariffs on Mexico and Canada, although the government later canceled these tariffs.

Trump's new stance assumes that consumers will support tariffs, despite the potential for price increases, which he has acknowledged before.

"There may be some short-term, temporary disruptions, and people will understand," he said in the Oval Office in January.

As Trump faces strong backlash from businesses, concerns from Republican allies, and a significant drop in approval ratings, he has changed his tone.

Trump's supposed advantage in the economy – his biggest selling point to American voters ahead of the 2024 election – has also been affected recently.

Pew pollsters found that Trump's economic confidence rating was 45% in April, the lowest level in such surveys since 2019.

Gallup's survey shows that Trump's economic approval rating is 44%, close to his average during his first term. Trump's economic approval rating remains higher than Biden's, whose approval rating dropped to around 35% in 2023.

In various surveys, Americans' economic outlook is worsening. A Pew survey last month showed that 45% of respondents believed the economic situation would worsen, up from 37% in March.

Trump's overall approval rating is also declining, a trend most presidents experience shortly after being elected. According to a recent Gallup survey, his approval rating fell from 47% in January to 44%.

This week, Trump's approval rating in Ohio also declined, with about 47% of respondents approving of his performance, down from 50% in a similar survey in February.

Even Trump's steadfast Republican supporters in Congress expressed concerns about the president's agenda.

"I think tariffs and trade wars have undoubtedly brought a lot of uncertainty and instability to the economy. What I hear from businesses is that investment is drying up. That's not good." Senator Ron Johnson, a Wisconsin Republican, said.

As tariffs begin to appear in consumer spending data, the backlash intensifies. Data shows a significant increase in car purchases before the May 3rd auto tariff took effect. The Commerce Department's data released on Wednesday showed a 57% increase in motor vehicle and parts spending in March.

The scale of提前 imports by U.S. wholesalers was so large that it even affected the first-quarter gross domestic product (GDP), with preliminary data showing an annualized contraction of 0.3%.

Businesses have been pressuring the president to reach an agreement with China to reduce tariffs. According to statistics from the International Monetary Fund, America's overall tariff rate has exceeded 25%, the highest level in over 100 years.

The top U.S. business lobbying group, the U.S. Chamber of Commerce, sent a letter to Treasury Secretary Scott Buchheit on Wednesday, calling for "immediate action" to reduce tariffs and sounded the alarm about recession risks.

"Even if reaching an agreement takes only a few weeks or months, many small businesses will suffer irreparable harm," wrote Susan Clark, president of the U.S. Chamber of Commerce.

This letter was sent out after Trump met with chief executives of major U.S. retailers, who reportedly warned that store shelves might be empty.

A spokesperson for Target told The Hill that the meeting was "to discuss the path forward on trade."

New data released on Wednesday showed that despite Trump acknowledging that his policies might lead to rising prices, inflation decreased before the full implementation of Trump's tariffs.

The personal consumption expenditure (PCE) price index increased by 2.3% year-over-year in March, down from 2.7% in February, approaching the Federal Reserve's target interest rate of 2%. Excluding volatile categories like food and energy, the PCE price index increased by 2.6%, the lowest level since last June.

Some investors, despite seeing the headline data decline, remain encouraged by GDP data and exclude the impact of increased imports, as imports are a subtraction in overall calculations.

"GDP growth excluding imports is still decent." Scott Helfstein, head of investment strategy at Global X ETFs, wrote in a comment. "Under normal circumstances, the Federal Reserve could almost declare victory... Unfortunately, policy communication and decision-making have paused the celebration."

This week, Trump told business leaders that his policies need "a little time."

"I think you have to give us a little time to push forward." Trump said on Wednesday when meeting with representatives from SoftBank, Toyota Motor North America, Amazon stores globally, and Eli Lilly, among others.

Original article: https://www.toutiao.com/article/1830967882286089/

Disclaimer: This article solely represents the author's own views.