“There’ll be a little disturbance,” President Donald Trump cautioned during a recent high-profile speech in Congress when discussing potential near-term impact of his America First trade policy. Indeed, his decisions to announce tariffs on allies and adversaries alike one day and pull them back the next are shaking up the stock market (and erasing any gains since November 2024), muddling the U.S. economic outlook, and pushing down consumer confidence to an eight-month low.
Most Americans now expect inflation to rise and their finances to deteriorate, a far cry from the president’s campaign promise to “make America affordable again.” Globally, intentional uncertainty lies at the core of Trump’s approach to Ukraine, the EU, NATO, Israel, and China — while arguably leaving an opening for Beijing to position itself as guarantor of stability.
Earlier this week, Trump did not rule out a recession as he spoke about a “period of transition” while his aggressive economic policies were coming into effect. Opinion polls indicate a downward trend in public support for his economic performance: Most voters, 56%, disapprove of his handling of the economy, more than at any point during his first term in office. At 31%, Americans are 5 percentage points less likely to say the economy is on the right track than they were in January. At 22%, they are 4 points less likely to say the same about their cost of living.
Among Republican voters, concerns about the cost of living are 6 points higher than they were two months ago, although their support for other Trump policies has grown. Overall, the economy and inflation remain top-of-mind issues for voters (at 82% and 80%), but many believe Trump does not sufficiently prioritize them — which could offer a clue to a 6-point decline in his net job approval since inauguration, which currently stands at 0.2%.
With new tariff announcements coming at a regular clip, industries that broadly support Trump’s tariffs — including steel, aluminum, and lumber — are raising concerns about retaliation from trading partners and potential disruption of global supply chains for products like auto components and construction materials. Detroit’s big three automakers have secured a one-month exemption for USMCA-compliant vehicles and parts, but steel tariffs alone could add up to $800 to the price of mainstream models and 15% to the production cost of some electric vehicle components. Inflationary pressures could in turn lead to reduced consumer demand and slower economic growth — which, coupled with a softening job market, could make a Trump recession a reality.
Recent Trump administration policy and personnel moves are doing little to dispel uncertainty about President Trump’s near-term objectives in China. On the one hand, the administration is ratcheting up pressure with another wave of 10% tariffs (on top of an earlier 10% and other duties imposed by the two prior administrations), investment rules, export restrictions, and port fees.
Trump’s investment policy memorandum aims to block China-affiliated investments in strategic American sectors like critical technology, infrastructure, and minerals, using CFIUS (which scrutinizes foreign investments in the U.S. for national security risks) to enforce these restrictions. The memo outlines provisions for new or expanded curbs on U.S. investment in sensitive technologies in China, including semiconductors, AI, and advanced manufacturing, while fast-tracking investments into the U.S. from America’s allies to get them to reduce their China exposure. Importantly, many of these measures may require an act of Congress to effect durable change — and legislation to curb American investment into sensitive sectors of China’s economy has stalled for the past year. But a review of the U.S. export control system, due April 1, could lead to a further tightening of the restrictions that are already in place.
On the other hand, there are indications that both Washington and Beijing are leaving the door open for talks, possibly in the form of a summit in June between Trump and Chinese leader Xi Jinping. Trump is reportedly looking to revive and expand his 2020 trade agreement with Xi, aiming for a deal that goes beyond adjusting trade dynamics to include some Chinese investment in the U.S. (particularly in clean tech sectors like solar, EVs, and batteries), nuclear security, and cooperation on ending the war in Ukraine. Some aspects of this plan, like strengthening nuclear security, are uncontroversial, but others, like Chinese investments in U.S. manufacturing, are politically divisive and have vocal opponents within Trump’s cabinet, the White House, Congress, and Republican-led state governments. To be sure, the sides first need to improve coordination on U.S. priorities such as fentanyl before preparations for trade talks could begin in earnest. In the meantime, we expect some softening in Trump’s China rhetoric if the Xi summit planning goes ahead — and further tightening of the screws if it does not.
After more than three years of war, the American political establishment’s response to a 30-day, unconditional ceasefire proposed by the Trump team and accepted by Kyiv has been that of “cautious optimism” tempered by doubts about Russia’s willingness to negotiate in good faith. Despite President Trump’s threats of expanded sanctions, his leverage over President Putin is limited. It is unclear if any of the escalatory measures that may be up his sleeve (like banning Russian energy transactions or “arming Ukraine to the teeth”) could persuade Putin to back off his demands that Ukraine give up its territorial integrity and hopes of a NATO membership in exchange for peace. The Russian leader’s notional support for Trump’s “great and correct” ceasefire idea is just the first step in a process that is expected to play out over the coming days, weeks, and possibly months.
Polls conducted since Trump’s Feb. 28 televised confrontation with Ukraine’s President Zelensky show that 44% of Americans disapprove of the way he is handling the war in Ukraine while 41% approve, including 73% of Republican voters. The share of Republicans that sympathize with Ukraine is at 41%, down 18 percentage points from January. (Another 44% sympathize with neither Ukraine nor Russia, and sympathy for Russia is unchanged at 5%.) They are also more likely than not to say the U.S. should push Ukraine to give up some of its territory if that means ending the war, 37% to 34%, marking a notable shift from December when Republicans were more likely to say Ukraine should hold its ground, 39% to 28%. (By contrast, voters overall are as likely to prefer not to push Ukraine to let Russia keep its territory as they were in December, 48% vs. 47%.)
More generally, though, between the nascent peace process in Ukraine and a fragile one in Gaza, polling data points to growing doubts about Trump’s aggressive approach, with net approval of his foreign policy performance down 15 points since January among all voters and down 14 points among Republicans. As the ceasefire talks continue, we will be watching for significant policy developments in Washington, Kyiv, and Moscow — but will not be holding our breath for a quick resolution.
