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Maybe Don’t Invite a Recession In

The Atlantic

www.theatlantic.com › politics › archive › 2025 › 03 › recession-fears-trump › 682004

On the campaign trail last fall, President Donald Trump promised a “new era of soaring income, skyrocketing wealth, millions and millions of new jobs, and a booming middle class. We are going to boom like we’ve never boomed before.” On Fox News this weekend, he promised a “period of transition.” He added: “It takes a little time. But I think it should be great for us. I mean, I think it should be great.” When the host asked, “Are you expecting a recession this year?” he didn’t say no.

The White House has traded a message of prosperity now for a message of prosperity soon, forecasting that the budget cuts and tariffs the Trump administration is implementing will redound to the country’s welfare in the near future: Businesses will bring their overseas operations back to America; a leaner government will leave more income for American firms and households. But economists doubt that the Trump administration’s policy changes will promote growth. And Trump’s message isn’t inspiring confidence among businesses and consumers. That alone might be enough to pitch the country into a downturn.

Already, Trump’s policies are slowing down the economy. The administration has kicked off a global trade war. It announced tariffs on Canada and Mexico, spurring the Canadian government to retaliate with its own tariffs, which then spurred Washington to retaliate for the retaliation; abruptly reversed some of the levies; increased tariffs on China, causing China to impose tit-for-tat measures; added tariffs to aluminum and steel products; proposed “reciprocal” tariffs on countries with taxes on American goods; and floated the idea of putting export tariffs on American agricultural products.

The tariffs are slowing trade and increasing costs for American consumers. Companies including Best Buy, Target, and Walmart have warned that they will have to bump up prices as import costs rise. Moreover, the unpredictability around the implementation of the tariffs has led to chaos in the markets. An index of policy-related uncertainty hit its highest-recorded level, aside from the early months of the coronavirus pandemic. Businesses are less sure of the country’s prospects now than they were after 9/11 or during the housing-market collapse in 2007. Manufacturing firms are pulling back on investment; companies are slowing down mergers and acquisitions; firms are downgrading their earnings estimates. The stock market has lost $4 trillion in value, as traders dump equities for safer investments.

Asked to clarify the White House’s trade policies this weekend, Trump responded: “We may go up with some tariffs. It depends. We may go up. I don’t think we’ll go down, or we may go up.” Businesses should stop whining about needing policy certainty, he said: “They always say that we want clarity,” but they “have plenty of clarity.” The real issue, he argued, was that “our country has been ripped off for many decades, for many, many decades, and we’re not going to be ripped off anymore.”

Beyond new taxes on businesses and consumers, the Trump administration is rescinding federal contracts and firing tens of thousands of federal workers, in many cases illegally. These cuts have not yet shown up in the jobs report, but economists expect them to, starting next month. Challenger, Gray & Christmas, an outplacement firm, estimates that the government has let more than 60,000 workers go—enough to wipe out nearly half of the employment gains the economy notched last month—and notes that private businesses are amping up layoffs as well.

The Trump administration argues that the country has to go through a “detox period,” as Treasury Secretary Scott Bessent put it. Yet the administration is not just cutting waste and eliminating fraud. The cuts at the IRS, for instance, are likely to reduce federal revenue by denying the government the resources it needs to audit high-income taxpayers. The Social Security cuts could interfere with seniors’ ability to access their retirement benefits.

The chaos emanating from Washington comes at a time when the economy is already slowing. Consumers are still being battered by high prices, particularly for housing; credit-card debt and default rates are climbing; the labor market is seizing up, with workers afraid to quit their jobs and hiring rates falling. As a result, indexes of consumer sentiment and small-business optimism are plunging. Last month, households became more pessimistic about current labor conditions, future business conditions, future income, and future employment prospects, the Conference Board reported.

Voters’ fear of a “detox period” or a “period of transition” could itself force the country into a literal vibecession, as households, feeling dour, pull back. Consumer spending makes up roughly two-thirds of the economy, and consumers make spending decisions not only on the basis of their own finances but also on their sense of where the country is headed. Reading the headlines on tariffs and hearing about DOGE-related job cuts, some families might put off the purchase of a new car. Others might cut short a summer vacation, decide to wait on a home-improvement project, or quit ordering pizza on Fridays. At the same time, firms might decide to wait on building a new plant or expanding into a new region, reducing employment gains and sapping revenue from other firms.

A downturn could result—or, even worse, given the tariffs’ impact on prices, a period of stagflation. Congress and the Federal Reserve would be faced with the choice of increasing spending and lowering interest rates to help create jobs, or lowering spending and increasing interest rates to hold down prices, incapable of doing both at the same time. The Trump White House might compound the pain by, as Elon Musk suggested, slashing Medicaid and Social Security benefits to finance tax cuts for rich households.

“It takes a little time,” Trump said of his promised boom. “But I think it should be great.” Instead, we might have a recession. We might have it soon. It definitely won’t feel great.

A Great Way to Get Americans to Eat Worse

The Atlantic

www.theatlantic.com › health › archive › 2025 › 03 › tariffs-fresh-vegetables-more-expensive › 682003

The wonder of the American supermarket is the way it exists outside of seasons. Stroll into any major grocery store on a dreary winter day, and you’ll find a bounty of fresh summer fruits and vegetables waiting for you: avocados, tomatoes, berries, bell peppers, cucumbers, squash, and green beans. The American supermarket does not, however, exist outside of economics. These fruits and vegetables are largely grown in Mexico, meaning they are roped up in President Donald Trump’s trade war. Last week, he enacted 25 percent tariffs on imports from Canada and Mexico; two days later, he backtracked, suspending most of the tariffs until April 2. (His 20 percent tariff on products from China remains in effect.) Presuming that the president follows through, expect lots of goods to get more expensive: tequila, lumber, that $11 handheld vacuum you bought from Temu on a whim. But perhaps the most direct way that Americans feel the tariffs will be at the grocery store.

Nearly 60 percent of the fresh fruit in the United States is imported, as is more than one-third of the country’s fresh vegetables. Most of that travels in from Mexico, but Canada also plays a part in America’s food supply. Twenty percent of the country’s vegetables, by value, come from our neighbor to the north. For all the debate around what people should eat, one thing pretty much everyone agrees on is that fruits and veggies are good for you. Health and Human Services Secretary Robert F. Kennedy Jr., on a campaign to “Make America healthy again,” has promoted numerous dangerous ideas about the American diet—but he’s right that Americans aren’t eating enough greens. The tariffs will worsen the problem. “People are going to immediately eat less fruits and vegetables, and will more likely rely on processed foods,” Mariana Chilton, a public-health professor at Drexel University and the author of The Painful Truth About Hunger in America, told me. A direct consequence of Trump’s tariffs could be pushing Americans to eat worse than they already do.

Ideally, tariffs could be offset by growing more produce in the U.S. That is precisely what Trump calls for as part of his “America First” agenda. But as The Atlantic’s Yasmin Tayag wrote last month, doing so would require an overhaul of the food system: “More land would have to be dedicated to growing fruits, vegetables, and nuts, and less of it to grains and sweeteners. It would also mean addressing labor shortages, increasing the number of farmers, finding suitable land, and building new infrastructure to process and ship each new crop.”

So how much more expensive will produce get? The tariffs apply to the value of a product at the border, not the retail price, so it’s not as simple as just slapping on a 25 percent surcharge on avocados. Over the course of the next year or so, if the tariffs take effect, the Budget Lab at Yale projects a 2.9 percent increase on fruits and vegetables. “These sound like small numbers,” Ernie Tedeschi, the lab’s economic director, told me. “These are not small numbers.” It’s the equivalent of “two years’ worth of fresh-food inflation in one fell swoop.” And that 2.9 percent increase is an average, meaning it encompasses all produce prices—including fruits and vegetables grown in the U.S. If you’re a big tomato eater and you like a side of green beans, the tariffs are going to especially hurt.

The Budget Lab expects a 1.7 percent bump on food prices overall. But this, too, wouldn’t be evenly distributed. On the opposite end of the cost spectrum, packaged foods would be among those least affected. They are made with imported fruits and vegetables, some of which may be coming from Mexico and Canada, but the overall amount tends to be negligible. (There just isn’t that much tomato on a frozen pizza.) “There might be other things that those food companies may be importing,” David Ortega, a food economist at Michigan State, told me, such as packaging. But “the pressure there is going to be a lot lower than in the actual fresh produce.”

In other words, Twinkies may get a little more expensive, while tomatoes may get a lot more expensive.   That’s going to make it harder for people to eat healthy, Sarah Bowen, a sociologist at North Carolina State University, told me. In her research interviewing moms about their food choices, “one of the things that came up again and again was that people wanted to buy healthier food, and especially fresh fruit, but they couldn’t afford it,” she told me. “We asked moms, ‘If you had more money to spend on food, what would you buy?’ And by far the most common answer was fresh fruit, specifically strawberries, grapes, things that kids like.” Even if you can swing it, there is a point where the discerning—or even vaguely price-conscious—consumer hits a limit and thinks, You know what, no. “It’s clear that people are already very worried about food prices,” Bowen said.

Of course, these changes will happen only at the margins. Lots of people might still buy an avocado that costs an extra 50 cents. And tariffs could have a perverse and uncomfortable upside, Caitlin Daniel, a researcher at Harvard, told me. Among the first purchases to go when budgets get tight is food that “people want to cut anyway,” she said—salty snacks, cookies, soda. That would be a limited victory. “In general, you’re probably going to see a decline in consumption of fresh produce, and that’s not good,” she said. The millions of Americans who already don’t eat enough vegetables will have even more of a reason not to do so. Even before the tariffs, fresh fruits and vegetables made up only “roughly a tenth” of the average middle-class grocery budget, Tedeschi said, drawing on the Bureau of Labor Statistics’ Consumer Expenditure Survey data.

The solace is that Americans still have plenty of ways to cut their broccoli costs. “There’s some latitude for substitution,” Daniel said. Instead of buying fresh, people might buy canned or frozen options “with really no change in diet quality,” she said. America grows tons of other fruits and vegetables; most of the country’s spinach, for example, is already grown domestically.

Price alone cannot explain why Americans eat the way they do. But the tariffs could underscore just how fundamental it is for understanding the country’s diet. Daniel has found in her research that people go to great lengths to continue eating fresh produce even when cash-strapped. “Whether people cinch up at the level of trying to buy from cheaper retailers,” she said, “going in on more couponing, shopping at multiple stores in search of deals—all of these things are going to contribute to what the ultimate impact on health is.” Tariffs or no tariffs, telling people what to eat is less effective than ensuring that they’re actually able to buy it. For an administration that wants to “Make America healthy again,” raising the prices of fruits and vegetables might not be the place to start.