Donald Trump's economic policies are creating chaos and confusion, and CNN's Matt Egan said it's only a matter of time until the uncertainty chokes the economy.
The president's long-threatened tariffs against Canada, China and Mexico have sparked a trade war, but the Trump administration has granted one-month exemptions to automakers after their executives asked for a reprieve, and Egan reported that the jolty rollout of the tolls was putting business leaders on edge.
"We knew that 'tariff man,' as the president has called himself, was back," Egan said, "but it turns out ... the sequel is more confusing than the original ... every single week there's new tariffs that are threatened. Some of them kick in, others are pulled back at the last moment. Others, like the reciprocal tariffs on copper and steel and aluminum, they still loom. It's almost impossible to keep track of. You kind of need like a baseball box score just to decipher it all, and this is really frustrating for business owners and CEOs, who famously hate uncertainty, right? They're trying to figure out how much the cost of their goods is going to be, but they can't because tariffs loom, right, and they're trying to figure out whether or not they need to hire workers or fire them. Do they need to raise prices or cut them?"
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Egan showed a graph illustrating the index that tracks uncertainty in trade policy, which he said was currently "through the roof" and at the highest levels since the 1990s.
"That is wild," said Kate Bolduan, host of "CNN This Morning."
Egan agreed, and pointed out that the index actually went back to the 1960s, but all of that data wouldn't fit onto the chart.
"It's higher than at any point since then, higher than Trump's first term, which makes sense, because what he's doing is just so much bigger in size and scope than his first term, right?" Egan said. "He's already put tariffs on triple the amount of imports than he did during his entire first four years in the administration. We're not even two months in, and I talked to a pet supply store owner in California, and he told me that, look, he's not a fan of tariffs, but it's actually the uncertainty that's almost worse here, he said. It's frustrating and stressful. He's trying to keep track of all the drama, but he can't keep up with it. Of course, I would just note that some of this is probably a feature, not a bug of the trump strategy, right? Because he views tariffs as a way to leverage other countries right to pressure them, and by keeping everyone guessing, that's a way to sort of maximize that leverage."
"But look, it's starting to show up in the economic data, it's starting to show up in markets, right?" Egan added. "We saw that private sector hiring slowed sharply last month. [Economist] Mark Zandi, he told you just the other day that it feels like the economy is gagging on the uncertainty, and he said that the longer that this uncertainty hangs around, the more likely the economy is going to start choking on it all."
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