{"id":59447,"date":"2025-08-14T11:52:30","date_gmt":"2025-08-14T06:22:30","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=59447"},"modified":"2025-08-14T11:52:30","modified_gmt":"2025-08-14T06:22:30","slug":"trumponomics-why-the-predicted-us-economic-crash-hasnt-happened-yet","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/trumponomics-why-the-predicted-us-economic-crash-hasnt-happened-yet\/","title":{"rendered":"Trumponomics: Why the Predicted US Economic Crash Hasn\u2019t Happened Yet"},"content":{"rendered":"<h2><b>Trumponomics Latest News<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Six months after US President Donald Trump\u2019s sweeping tariff hikes, the predicted economic collapse has not materialised.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The S&amp;P 500 is about 10% higher since \u201cLiberation Day,\u201d and the dollar, after dipping, has recently strengthened.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Despite tariffs on almost all major trading partners, consumer prices in the US have not spiked significantly.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The muted inflation response raises the key question: will tariffs trigger only a one-time price jump, or lead to prolonged inflationary pressure?<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This article examines the unexpectedly modest short-term economic impact of \u201cTrumponomics,\u201d specifically the aggressive tariff strategy implemented by President Trump.<\/span><\/li>\n<\/ul>\n<h2><b>Tariff Magnitude and Global Reach<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The US has increased tariffs significantly on virtually all trading partners \u2014 15% on economies like the EU, Japan, and South Korea, and 35\u201350% on countries such as Canada, Switzerland, Brazil, and India.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">With January\u2019s average tariff at 3%, current rates could average 15\u201320%, a shift that is inherently inflationary even if importers or retailers absorb some of the costs.<\/span><\/li>\n<\/ul>\n<h2><b>US Economy\u2019s Current Resilience Amid High Tariffs<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The US economy has retained stability despite higher import duties, largely because President Trump inherited a growing economy with over 2% GDP growth, near full employment, and low inflation.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Stock markets have also been buoyed by the booming artificial intelligence sector, significantly boosting tech company earnings and market sentiment.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Importers accelerated shipments ahead of tariff enforcement, meaning many goods currently on shelves are not yet affected by higher duties.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Additionally, Trump\u2019s repeated waivers and deadline extensions have delayed the full impact of tariffs.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Warning Signs in the Labour Market<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Despite overall resilience, labour market data shows weakness.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">In July, non-farm payrolls rose by only 73,000, with significant downward revisions for May and June.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Risks Ahead: Inflation and Job Losses<\/b>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">While inflation has not surged yet, higher import costs are expected to filter into prices, potentially denting consumer demand and slowing job creation.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Fall-Winter\/Christmas season could reveal these strains, influencing voter sentiment ahead of midterm elections.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><b style=\"font-size: inherit;\">Signs of a Looming US Economic Slowdown<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Inflationary effects are becoming evident, with major retailers like Costco and Walmart raising prices on appliances, furniture, tools, and children\u2019s items.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">These increases indicate that higher import costs from tariffs are starting to filter through to consumers.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">US GDP grew at an annualised 3% in Q2 2025, rebounding from a 0.5% contraction in Q1.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">However, this surge was largely due to strong consumer spending on goods imported in advance of tariffs. This temporary boost raises concerns about a sharp slowdown in the coming quarters.<\/span><\/li>\n<\/ul>\n<h2><b>Fiscal Concerns and Rising Treasury Yields<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Trump\u2019s <\/span><b>tax bill has sparked worries about the US deficit<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">These concerns were reflected in the recent rise in Treasury yields following a weak $42 billion bond auction.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The 10-year note yield rose to 4.22%, and the 30-year bond yield climbed to 4.813%, signalling investor apprehension.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The US Federal Reserve faces a dual challenge: <\/span><b>balancing the need to contain inflation without exacerbating weaknesses in the job market<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Keeping interest rates high could stabilise prices but also risk further employment slowdown.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">With inflation expected to rise and job creation likely to taper, the Fed\u2019s policy decisions are under intense scrutiny.<\/span><\/li>\n<\/ul>\n<h2><b>High Tariffs Likely to Persist Beyond Trump<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The latter half of 2025 is expected to be more volatile, with Trump\u2019s unpredictable tariff policies beginning to influence long-term pricing decisions.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">In this new trade environment, companies will thrive not only through innovation or efficiency, but also by navigating the tariff framework skillfully and lobbying effectively for government concessions.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The resulting heavy spending on lobbying will make it politically and economically challenging to dismantle these tariffs, even if a future administration desires to do so.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Consequently, the US is likely to maintain a high-tariff trade stance well beyond Trump\u2019s tenure.<\/span><\/li>\n<\/ul>\n<p><b>Source:<\/b> <a href=\"https:\/\/indianexpress.com\/article\/business\/donald-trump-tariffs-us-economy-impact-10186350\/\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">IE<\/span><\/a><span style=\"font-weight: 400;\"> | <\/span><a href=\"https:\/\/prospect.org\/economy\/2025-08-06-bleak-future-of-trumponomics\/\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">TAP<\/span><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Explore why Trump\u2019s high tariffs haven\u2019t yet caused an economic crash, and why challenges may intensify in the coming months.<\/p>\n","protected":false},"author":18,"featured_media":59492,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[60,2184,22,59],"class_list":{"0":"post-59447","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"tag-mains-articles","9":"tag-trumponomics","10":"tag-upsc-current-affairs","11":"tag-upsc-mains-current-affairs","12":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/59447","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=59447"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/59447\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/59492"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=59447"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=59447"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=59447"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}