The Trumpcession

The U.S. economy can absorb a hit or even a few. But can it withstand a barrage of destabilizing factors?

It’s not even been two months since 47 took office, and already there is talk of the dreaded R word.

In a matter of weeks, the U.S. has gone from having the most robust economy in the G7—with low unemployment, tamed inflation, falling interest rates and steady growth in wages and GDP—to being on the brink of a big economic downturn.

Yes, a recession now looms.

How has this happened so fast? Let’s helicopter over the hellscape that Trump and his administration have created in such a short period of time and assess where the biggest trouble spots are. Any of these would be cause for alarm and would be top of the news on Fox had they occurred under President Biden. But with Trump, the response has all been rather muted.

For now, anyway. Should conditions worsen, not even the best right wing spin doctors will be able to explain away the problems, blame them all on the prior administration, or somehow convince most voters that everything is still peachy.

Ready to climb on board? Strap in for a quick fly-over.

Trump’s own big mouth

Even though we should be used to his words by now, and even though they’re full of lies, contradictions, non-sequiturs, ad hominem attacks and grammatical errors, Trump’s words apparently still matter. And they can roil markets.

Trump’s statements indeed directly caused the stock market to tank on Monday. That’s because he gave interviews over the weekend during which he hinted that he was expecting a recession. As CNBC reported,

“There is a period of transition, because what we’re doing is very big,” Trump said Sunday on the Fox News show “Sunday Morning Futures.”

So wait. Are we about to enter that “period of transition’? How bad are we talking? Trump was hardly reassuring.

“We’re bringing wealth back to America. That’s a big thing. ... It takes a little time, but I think it should be great for us.”

Asked if he believed a recession was imminent, Trump said, “I hate to predict things like that.” He later added, “Look, we’re going to have disruption, but we’re OK with that.”

Narrator: The markets were not OK with that.

This was no Trumpian gaffe or off-the-cuff remark. When asked again later about a recession, Trump was less than reassuring. As the New Republic noted:

“Are you worried about a recession?” a reporter asked him on Air Force One Sunday evening. “Maria Bartiromo asked you, and you kind of hesitated.”

The president shrugged. “I’ll tell you what, of course you hesitate.”

If the President is hesitating, why wouldn’t investors? Then came the useless verbiage and puffing:

“All I know is this: We’re gonna take in hundreds of billions of dollars in tariffs and we’re gonna become so rich you’re not gonna know where to spend all that money, I’m telling you, you just watch! We’re gonna have jobs, we’re gonna have factories, it’s gonna be great.”

Not just his words but his deeds

“Pay attention to what he does, not what he says.” We’ve heard apologists for Trump tell us that for years. The problem is, what he does these days is as bad as what he says. In some cases, it’s even worse.

Take tariffs. Trump said a lot of things and gave a lot of reasons for why we need to hike tariffs not only on our competitor China but also on our closest allies and neighbors, Canada and Mexico. But tariffs have hard deadlines, and last week Trump allowed the tariffs to go into effect, only to yank most but not all of them back for yet another month, and then announce a new 50 percent tariff on Canadian steel and aluminum imports just this morning in retaliation for Canada imposing electricity duties on U.S. users.

Trump may delight in being a chaos agent on trade, and he may believe this somehow gives him an advantage in negotiations later. But there are real costs to these reckless actions.

For example, the threat of high tariffs is roiling sensitive industrial supply chains. Let’s take an example: the minerals nickel, cobalt and platinum-group elements (PGEs). As Lyle Trytten, known as the “Nickel Nerd,” wrote,

Just did a quick analysis on Ni-Co-PGE for the US market. US is 70-100% dependent on imports for these materials.

He noted that the U.S has picked fights with all of the top producers of these minerals, Canada, Mexico, China, Europe and South Africa. Three of those are now hot trade fights, with South Africa about to tip into one. Trytten observed,

Can the US just build that domestic capacity internally? Short answer - no. Certainly not during the Trump administration. Need permits for mines and then construction, and the [U.S.] is not long on Ni-Co-PGE deposits. Coming up with 100 kt/y new Ni production in concentrates is non-trivial - the three Minnesota projects combined look like they could deliver less than 50% of that. Then need permits for smelters/refineries plants and then construction. And then a hard one - startup.

He concluded, “So will the tariffs really bring production home? No. Will it increase inflation? Yes.”

Now multiply that problem across supply chains in automotive parts, agriculture, construction and energy, and you have a real whopper of a problem for the whole economy.

Terrorizing workers

Add to this the turmoil in the labor force. We’re all familiar with how Trump and Elon Musk have ordered mass firing of federal workers. This is part of a shock downsizing that is not only designed to paralyze the federal government and its functions but also to demoralize those who remain and force them out. Productivity has fallen, no surprise there, and many who remain are looking at options to escape the nightmare before their time in the barrel comes.

But federal workers aren’t the only ones being driven from their jobs. ICE is targeting migrants across the country who normally labor in our fields, processing plants, construction and healthcare services. As I noted in a video script for Robert Reich

Let’s break it down by industry. In agriculture, it’s estimated that some one million farmworkers are currently undocumented. That’s around one in every five farmworkers. If they were to suddenly disappear, either because they were deported or went into hiding to avoid authorities, we could face a national food shortage. And as we learned during the pandemic, any disruption in our food supply can result in massive spikes in inflation, panic buying and hoarding by consumers, and price gouging by distributors and retailers.

In construction, there are some 1.3 million undocumented workers. The loss of these workers would result in immediate project delays, meaning increased costs and even fewer available houses. And you guessed it: That means higher rents and far less affordable housing for everyone.

The terrorizing of workers leads us to the worst of all worlds, where costs are going up even while jobs are disappearing.

Undoing Biden’s signature accomplishments

We know that Trump loves to come in and wreck whatever his predecessors have done, sometimes because he disagrees with the aims, but often purely out of spite. The reason doesn’t really matter, because the effect is economic whiplash.

Two of Biden’s biggest bills were the Inflation Reduction Act, which brought down the cost of healthcare and paid for a lot of green energy projects, and the bipartisan Infrastructure bill, which has funded thousands of much needed upgrades and projects across the country. Upon entering office, Trump kneecapped both of these. His Office of Management and Budget illegally froze hundreds of billions of dollars that Congress had already appropriated under these bills, forcing blue state attorneys general to sue to get the money flowing again. The stoppages, however, created havoc and uncertainty and drove many intended recipients toward bankruptcy.

Trump also has recently railed against the bipartisan CHIPS and Science Act, calling the law a “horrible, horrible thing.” During his speech to a joint session of Congress, he told lawmakers, “You should get rid of the CHIP Act [sic].” He made this statement despite broad, bipartisan support for that law. As the New York Times reported,

The CHIPS program was one of the few things to unite much of Washington in recent years, as lawmakers on both sides of the aisle worked with private companies to draft a bill that would funnel $50 billion to rebuild the U.S. semiconductor industry, which makes the foundational technology used to power cars, computers and coffee makers. After President Joseph R. Biden Jr. signed it into law in 2022, companies found sites in Arizona, New York and Ohio to construct new factories. The Commerce Department vetted those plans and began to dole out billions of dollars in grants.

Now, Mr. Trump is threatening to upend years of work. Chip company executives, worried that funding could be clawed back, are calling lawyers to ask what wiggle room the administration has to terminate signed contracts, said eight people familiar with the requests.

And today, the Trump administration (checks notes) announced that it was cancelling a billion dollars in contracts with local farms for the provision of school meals. As Politico reported,

The Agriculture Department has axed two programs that gave schools and food banks money to buy food from local farms and ranchers, halting more than $1 billion in federal spending.

Roughly $660 million that schools and child care facilities were counting on to purchase food from nearby farms through the Local Food for Schools Cooperative Agreement Program in 2025 has been canceled, according to the School Nutrition Association.

Together these actions have spread uncertainty in construction, manufacturing, transportation, energy, healthcare, hospitality and agriculture. It takes a special kind of genius to wallop all of these industries so hard so soon into a new term.

As outbreaks spread, RFK Jr. fiddles

Measles is making a resurgence, due in part to low vaccination rates and rampant misinformation about vaccines. There are now hundreds of cases in 12 states with two reported deaths from the disease.

But our new Health and Human Services head doesn’t view it as a crisis. As the New York Times chillingly reported, in an interview, RFK, Jr.

issued a muffled call for vaccinations in the affected community, but said the choice was a personal one. He suggested that measles vaccine injuries were more common than known, contrary to extensive research.

He asserted that natural immunity to measles, gained through infection, somehow also protected against cancer and heart disease, a claim not supported by research.

He cheered on questionable treatments like cod liver oil, and said that local doctors had achieved “almost miraculous and instantaneous” recoveries with steroids or antibiotics.

And with bird flu spreading across the country—wiping out millions of chickens along with countless wild birds, while driving the price of eggs sky high—the response by the administration has been (checks notes again) to fire the experts in charge. That’s right: The USDA terminated the positions of the very people monitoring the “highly pathogenic avian influenza (HPAI)” only to realize its error and try to hire them back later. NPR reported on this incredible statement the the USDA:

“Although several positions supporting HPAI were notified of their terminations over the weekend, we are working to swiftly rectify the situation and rescind those letters,” a spokesperson wrote in a statement shared with NPR.

It’s unclear how many experts actually want their jobs back under this chaotic and heartless administration.

The chance of widespread disease or even another pandemic is decidedly non-zero, particularly with once eradicated childhood diseases making a comeback and avian influenza threatening to mutate to a human-to-human transmittable form. Any major outbreak of disease could shake consumer confidence, which has already fallen sharply under Trump. But rather than reassure the public through decisive measures, we are hearing about anti-scientific fringe remedies and the “oopsie!” firings of those who might have actually protected the public.

A perfect storm

Our economy is resilient, and it can handle a great deal of pressure. But downturns often occur as a result of a confluence of negative factors, and weaknesses in even one sector can have knock-on effects in others.

Here, we are seeing weakness and loss of trust and confidence across many sectors, with a predictable feedback effect. Higher prices shake consumer confidence, which rattles markets and causes hesitancy in business decision-making. And that begins the downward cycle anew.

To use Trump’s own words, “Of course you hesitate.”