Businesses and consumers are still trying to decipher what the Trump administration’s exact plan is for trade and what it will mean for the overall economy.

President Trump has announced, then delayed, tariffs multiple times. On April 2, in what was to be the biggest imposition of duties on imports so far, Trump unveiled a global approach to tariffs that he said was based on “reciprocity,” though the calculations apparently were based on the size of the trade deficit between a given nation and the United States, not on the tariffs that other nations impose.

“Taxpayers have been ripped off for more than 50 years,” Trump said on what he dubbed “Liberation Day” when announcing the tariffs. “But it is not going to happen anymore.”

Several countries quickly announced countermeasures, critics warned that the plan would lead to a trade war, inflation and possibly a recession, and stock markets plummeted, with the Dow Jones Industrial Average losing more than 10 percent of its value in six days and the S&P 500 Index dropping more than 12 percent during that time.

On April 9, Trump, observing that people “were getting a little bit yippy, a little bit afraid,” announced a 90-day pause in most of the tariffs, though he not only kept the ones targeting Chinese goods in place, he increased them.

“Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately,” Trump stated in a social media post. “At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable.”

The markets recovered about two-thirds of the previous week’s losses immediately following the reversal, but the rally was short-lived. As of April 21, the Dow was down 9.6 percent since April 2 and 10.3 percent since the start of the year, while the S&P had lost 9 percent and 12.3 percent, respectively.

Trump, meanwhile, has been pushing for monetary policy to offset the disruptive effects of trade policy and has expressed frustration with the Federal Reserve for not lowering interest rates to stimulate the economy. On April 17, Trump posted that Fed Chair Jerome “Powell’s termination cannot come fast enough.” The president took aim at Powell again four days later, writing, “There can be a slowing of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW.”

Powell’s four-year term (his second) is set to end on May 15, 2026. National Economic Council Director Kevin Hassett told reporters on April 18 that “The president and his team will continue to study the matter” of whether Trump can fire Powell.

In an April 16 speech at the Economic Club of Chicago, Powell said “the U.S. economy is still in a solid position,” while noting that the administration’s policies on trade, immigration, fiscal policy, and regulation “are still evolving, and their effects on the economy remain highly uncertain.”

Expressing a widely-held opinion that the administration disputes, he went on to say, “Tariffs are highly likely to generate at least a temporary rise in inflation. The inflationary effects could also be more persistent.”

Powell then referenced a 1980s movie while delivering more news that Trump surely did not want to hear.

“As that great Chicagoan Ferris Bueller once noted, ‘Life moves pretty fast’” Powell said. “For the time being, we are well positioned to wait for greater clarity before considering any adjustments to our policy stance.”

The target range for the Federal Funds Rate is 4.25-4.5 percent. The Federal Reserve Federal Open Market Committee, the body that sets that range, met most recently on March 19 and made no change to it while observing that, “The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid. Inflation remains somewhat elevated.”

Three weeks after the Fed’s meeting, the Bureau of Labor Statistics reported that year-over-year inflation in March was 2.4 percent. While this was still above the central bank’s target of 2 percent, there has not been a month with lower inflation since February 2021. (Inflation was also at 2.4 percent in September of last year.)

The unemployment rate is at 4.2 percent following the creation of 228,000 jobs in March, according to the bureau. Unemployment has hovered between 4 and 4.3 percent since May 2024.

“Job gains occurred in health care, in social assistance, and in transportation and warehousing,” the agency stated. “Employment also increased in retail trade, partially reflecting the return of workers from a strike.”

Not surprisingly, the bureau also noted that, “Federal government employment declined.” Since Trump took office, about 260,000 federal workers (out of a workforce of 2.3 million) have left their jobs, either voluntarily or not, largely as a result of the work of Elon Musk’s Department of Government Efficiency (DOGE).

Consumer confidence has sunk amid the tariff talk, with the Index of Consumer Sentiment from the University of Michigan’s Surveys of Consumers experiencing a decline in April that was described by the surveys’ director as “pervasive and unanimous across age, income, education, geographic region, and political affiliation.” The index, which has fallen for four straight months, was down nearly 11 percent from March and more than 34 percent from April 2024.

“Consumers report multiple warning signs that raise the risk of recession: expectations for business conditions, personal finances, incomes, inflation, and labor markets all continued to deteriorate this month,” the director said. “The share of consumers expecting unemployment to rise in the year ahead increased for the fifth consecutive month and is now more than double the November 2024 reading and the highest since 2009.”

The Conference Board’s Consumer Confidence Index has also fallen for four months in a row. It lost 7 percent from February to March.

“Consumers’ expectations were especially gloomy, with pessimism about future business conditions deepening and confidence about future employment prospects falling to a 12-year low,” the board’s senior economist, global indicators, said. “Meanwhile, consumers’ optimism about future income – which had held up quite strongly in the past few months – largely vanished, suggesting worries about the economy and labor market have started to spread into consumers’ assessments of their personal situations.”

Confidence has also slipped in the manufacturing sector, though not as dramatically. The Institute for Supply Management’s Purchasing Managers Index decreased by 2.6 percent from February to March, falling below the contraction/expansion threshold for the sector.

“Demand and production retreated and de-staffing continued, as panelists’ companies responded to demand confusion,” the chair of the institute’s Manufacturing Business Survey Committee said. “Price growth accelerated due to tariffs, causing new order placement backlogs, supplier delivery slowdowns and manufacturing inventory growth.”

Housing starts in March were 11.4 percent lower than in February but 1.9 percent higher than in March of last year, according to the Census Bureau and the Department of Housing and Urban Development. Existing home sales increased by 4.2 percent from January to February, the National Association of Realtors reported.

“Home buyers are slowly entering the market,” the association’s chief economist said. “Mortgage rates have not changed much, but more inventory and choices are releasing pent-up housing demand.”

The dollar on April 21 was trading at 0.87 euros, 0.75 pounds, 140.82 yen and 7.29 yuan.