As of March 23, 2025, Donald Trump’s second term is underway, and his ambitious tariff policies—such as 25% on Canada and Mexico and 10%-20% on China—are facing significant headwinds. While Trump has historically leaned on tariffs to bolster American manufacturing and national security, current economic and political realities are curbing his ability to enforce them aggressively. From a retail investor’s standpoint, understanding these constraints involves analyzing Trump’s approval ratings, U.S. sentiment, economic recession risks, stock market declines, and unfavorable factors stacking against him and the nation.
Trump’s Approval Ratings and Public Sentiment
Recent data suggests Trump’s approval rating hovers around 48%, with 52% disapproving, reflecting a deeply polarized nation. Posts on X indicate that while his base supports tariffs as a tool for economic sovereignty, a growing segment of the public fears the fallout—rising consumer prices and job losses. For retail investors, this split signals uncertainty. A president with less than majority support struggles to rally Congress and the public behind bold policies, especially ones as divisive as tariffs.
Economic Recession Risks and Stock Market Woes
The U.S. economy is teetering on the edge in 2025. Economic models project a GDP decline of 2.8% in Q1, with the S&P 500 down 4.8% year-to-date. Trump’s tariff threats—potentially slashing global GDP by over 1% if retaliation escalates—are a key driver. Retail investors are watching their portfolios shrink as uncertainty looms. Historical precedent from the 2018-2020 trade war, which shaved 0.5% off global GDP, looms large, and today’s higher proposed rates amplify those fears. With consumer sentiment dropping 10% in February, the appetite for aggressive tariffs is waning.
Unfavorable Factors for Trump and the U.S.
Several factors undermine Trump’s tariff push. Globally, allies like Canada and Mexico warn of retaliation, threatening supply chains critical to U.S. industries. Domestically, businesses reliant on imports—think retail and manufacturing—face higher costs, passing them onto consumers already stretched thin. For investors, this spells trouble: companies like Walmart or Ford could see profit margins erode, dragging stock prices lower. Add China’s potential counter-moves, and the U.S. risks losing export markets, further straining economic growth.
The American Public’s Mood
U.S. citizens are restless. Inflation fears, fueled by tariff-induced price hikes, clash with Trump’s promise of prosperity. X posts highlight recession concerns, with some predicting a “tariff-triggered downturn.” Retail investors, often middle-class Americans, feel this pinch acutely—rising costs hit their budgets while stock declines hit their savings. This discontent weakens Trump’s leverage to double down on tariffs, as public backlash could force a pivot.
Why Tariffs Are Stalling
Trump’s inability to push tariffs aggressively stems from this perfect storm: shaky approval, economic fragility, and a public souring on costly policies. For retail investors, the takeaway is clear—volatility is king in 2025. Diversifying beyond U.S. equities into safe havens like gold or bonds may be prudent as Trump navigates these choppy waters.
