Trump Risks American Consumer Backlash Over Tariffs, Poll Shows

Yahoo

27-02-2025

(Bloomberg) -- President Donald Trump's plan to impose new tariffs on imports to force manufacturers to relocate production to the US is getting a skeptical reaction from one important audience: American consumers.
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Almost 60% of US adults expect Trump's tariffs will lead to higher prices, according to a Harris Poll conducted for Bloomberg News. Some 44% say the levies are likely to be bad for the US economy — compared to 31% who say they'd be a boost.
Even within the president's own party, many aren't sold on his trade agenda. Only half of Republican respondents said the tariffs would be an economic boon. The Harris Poll of 2,121 US adults was conducted Feb. 6 through Feb. 8 and has a margin of error of 2.4 percentage points.
While many of Trump's proposed levies are not yet enacted, the findings signal that his plans for a tariff onslaught risk political blowback — and that his messaging on the issue hasn't landed with many consumers.
Trump became the first Republican president in some two decades to win the popular vote. He also swept each of the swing states. That carried over to an approval rating of over 50% when he first took office in January. While that has gradually softened over the course of the first month of his presidency, it still remains higher than levels seen during his first term.
He reclaimed the White House in part by promising a new age of prosperity and appealing to anger about price increases. He has touted tariffs as a solution not just for bringing manufacturing jobs back to the US, but for raising government revenues and offsetting the cost of tax cuts.
But economists have long pointed out that tariffs will lead to higher prices and slower growth.
For the consumers who are the engine of the US economy, that could mean noticeable consequences: According to the Peterson Institute for International Economics, the tariffs that Trump has already imposed on Chinese products this year and threatened against imports from Canada and Mexico would cost the typical US family more than $1,200 per year.
Retailers like Walmart Inc. are already bracing themselves, with the big-box giant's chief financial officer recently warning of 'uncertainties related to consumer behavior and global economic and geopolitical conditions.' In January, the biggest decline in two years in retail sales was blamed at least partly on tariffs and what some economists saw as a rush at the close of 2024 to get ahead of price increases caused by new import duties. That dash petered out in the first month of this year.
'Tariff worries are real,' economists at Wells Fargo & Co. wrote after the retail sales slump in a Feb. 14 note to clients.
It may not help that economic cracks were beginning to show even before some of his specific tariff plans were unveiled. Inflation ticked up again in January and remains above the Federal Reserve's target rate. Consumer sentiment has weakened, with a February reading showing the highest rate of long-term inflation expectations seen since 1995. In data released Tuesday, a separate gauge showed consumer confidence dropping the most since 2021.
Meanwhile, in the poll for Bloomberg News, some 61% of US adults said they'd noticed an increase in grocery prices in the last month. While food prices excluding eggs only edged up slightly in January, the poll result suggests consumers still perceive an unfavorable pricing environment at the supermarket.
Much of the concern among economists about Trump's tariffs is about business investment: that uncertainty over US trade policy will lead to companies putting capital expenditures and hiring plans on hold. But tariffs could also have a chilling effect on consumer spending, as shoppers often become more cautious amid concerns about higher prices.
'Right now people are just worried about anything when it comes to inflation because prices are already so high,' said Eliza Winger, US economist for Bloomberg Economics. 'They are more sensitive to any sort of headline when it comes to inflation numbers.'
Studies of Trump's first-term tariffs found American importers and consumers bore most of the cost of the import taxes. Since his inauguration, Trump has imposed new 10% tariffs on products from China. He's threatened broad 'reciprocal' duties on all trading partners, as well as tariffs of 25% or more on most imports from Canada and Mexico and in certain product categories such as automobiles, pharmaceuticals and semiconductors.
Trump says the levies will spur more factory jobs. In fact, the opposite happened in his first-term trade war, and some voters appear unconvinced the policies will have the effect Trump suggests.
'I can see an argument for tariffs being utilized as a negotiating tool to bring down tariffs on the other side,' said Scott Alford, 34, a tech worker in Denver who voted for a third-party candidate in November, but says he often aligns with the Republican platform. 'That being said, I don't believe it is realistic just simply because of tariffs we're going to see large-scale manufacturing moving back to the US.'
'I would prefer to see tariffs used in limited capacity in critical industries important to the country,' Alford said. Respondents in the poll were about evenly split on whether they thought tariffs would create more manufacturing and jobs in the US and thus be worth the pain of higher prices.
But even if the tariffs did spur a manufacturing revival, it's not clear how much political capital it would deliver for Trump.
A plurality of respondents in the poll said being able to comfortably afford household expenses was the most important gauge of whether the US economy is strong. Just 13% said making more products in the US is most crucial.
Just 38% of consumers said they thought the US economy was working for them. When they were asked what emotions they felt about the economy, stressed (42%) and anxiety (41%) led the list.
Trump's legacy will partly ride on whether he can quell some of that unease.
--With assistance from Mario Parker and Laura Davison.
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