Trump's tariffs loom over economy as shipments from China fall

American businesses face uncertainty and economic toll as Trump's tariffs on Chinese imports lead to higher prices and layoffs.

American businesses are cancelling orders from China, postponing expansion plans and hunkering down to see what trade policy surprises President Donald Trump plans to spring on them next.

The President’s massive and unpredictable taxes on imports seem likely to mean emptier shelves and higher prices for American shoppers, perhaps within weeks.

And the higher costs and paralysing uncertainty could exact an economic toll: U.S. consumers are in the biggest funk since COVID-19 hit five years ago, and economists say recession risks are climbing.

An early sign of the damage is expected to emerge on Wednesday (April 30, 2025) when the Commerce Department releases its first look at first-quarter economic growth.

The economy is forecast to have expanded at an annual pace of just 0.8% from January through March, according to a survey of economists by the data firm FactSet.

That would be the slowest quarter of growth in nearly three years and would be down from a healthy 2.4% in the last three months of 2024. Many economists suspect things were even worse.

Asked how much of deterioration in the world’s biggest economy could be traced to Mr. Trump’s erratic policies, Boston College economist Brian Bethune said: “All of it.’‘ As he promised on the campaign trail, Mr. Trump has upended decades of American trade policy. He’s been imposing — then sometimes suspending — big import taxes, or tariffs, on a wide range of targets. He’s currently plastered a 10% levy on products from almost every country in the world.