Donald Trump’s tariffs spook consumers weary of inflation | The high spirits that greeted the US president’s election triumph in November have faded

> US consumers are growing increasingly anxious as President Donald Trump rolls out an agenda that includes tariffs on an array of trading partners.

> A pair of surveys closely watched on Wall Street have revealed a darkening outlook for the economy that stands in contrast to the ebullience that greeted Trump’s election in November.

> The sombre mood among consumers — a pillar of America’s robust economic growth — has worried some investors and stoked a decline in Wall Street’s S&P 500 equities index in recent days.

> The Conference Board’s Consumer Confidence Index this month fell by the most since August 2021, when the contagious Delta variant of the coronavirus was sweeping through the country. Survey respondents mentioned trade and tariffs at a level not seen since Trump’s first term in 2019, said the Conference Board, a think-tank.

> In the University of Michigan’s survey of consumer sentiment, about two in five respondents spontaneously mentioned tariffs, up from less than 2 per cent before the election, as overall sentiment declined by 10 per cent. All five components of the Michigan index deteriorated, a rare occurrence, said survey director Joanne Hsu.

> “The declines this month were unanimous across different demographic groups, as well as across multiple dimensions of the economy,” Hsu said.

> “People are feeling less confident about personal finances, about buying conditions for big-ticket items as well as about business conditions both right now and in the future.”

> The Michigan index had improved for five straight months to December as expectations for the economy rose. Some consumers felt relief that the presidential election ended without a drawn-out fight, as when Trump disputed his loss to Joe Biden in 2020. Executives also praised Trump’s deregulatory agenda.

The tariffs are painful and the introduction will make products more expensive, but they solve a very urgent problem that the US is facing and that so far only Trump has dared to tackle.

The problem is this: