President Donald Trump has declared his second term off to the “greatest start of any presidency ever.” But the economic data tell a more complicated — and far less triumphant — story. In his first 100 days back in office, the U.S. economy has contracted, financial markets have delivered historically weak returns, and confidence indicators have slumped.
Trump’s claim comes despite the economy posting its first quarterly decline in three years, a result largely attributed to a surge in imports as corporations raced to avoid his escalating tariffs. While key hard indicators such as employment and inflation have remained relatively stable, so-called soft data — including sentiment and forward-looking investment plans — have deteriorated sharply.
Trade Policy Sparks Economic Whiplash
The contraction reflects ripple effects from Trump’s sweeping tariff regime, now the most aggressive protectionist campaign in over a century. The president has imposed steep new duties on a wide range of imports, including critical components in manufacturing, electronics, and consumer goods.
The administration’s erratic rollout of trade measures — including abrupt reversals and stalled reciprocal duties — has created an atmosphere of confusion for both U.S. businesses and foreign governments. According to Bloomberg Economics, the global trade uncertainty index has spiked to record highs, surpassing even the turbulence of Trump’s first-term trade war.
Investor Confidence and Markets Falter
U.S. equity markets have reacted negatively to the trade-driven uncertainty. The S&P 500 is down nearly 8% since January 20, marking the worst start to a presidency since the 1970s, when Gerald Ford and Richard Nixon faced economic headwinds. The dollar has also weakened against major currencies, further undermining investor sentiment.
Trump has frequently used stock market gains as a measure of success, but those arguments have become more tenuous. “We’re seeing a complete reversal of confidence-driven momentum,” said Rachel Godwin, chief strategist at NovaPoint Research. “Trade unpredictability is overshadowing otherwise stable labor and inflation data.”
Consumer and Business Sentiment Slide
Surveys of consumer confidence, business investment intentions, and hiring plans have all declined in the first three months of 2025, signaling hesitation among key economic actors. Many executives cite concerns over supply chain disruptions, tariff compliance costs, and the potential for retaliatory actions by major trading partners.
For businesses, Trump’s renewed emphasis on tariffs has sparked fresh fears of margin compression and capital expenditure pullbacks — especially in manufacturing and logistics. “It’s hard to plan 18 months out when policy changes every two weeks,” noted one CEO of a Midwest industrial firm.
Faith in Trump’s Economic Leadership Erodes
Trump’s appeal to voters in the 2024 election hinged in large part on his perceived economic competence. But recent polling indicates that public confidence in his stewardship has started to wane. Voters cite higher prices, market losses, and rising uncertainty as key concerns.
“People believed Trump would bring clarity and strength to the economy,” said Gregory Madsen, a political analyst with Northbridge Policy Group. “Instead, they’re getting mixed signals and volatility — and it’s starting to erode the narrative.”
Looking Ahead: Can Hard Data Hold the Line?
Despite the noise, the fundamentals — employment, wage growth, and core inflation — remain resilient for now. But economists warn that sustained trade disruptions and weak sentiment could filter into the real economy later this year, especially if business investment continues to slow.
“Hard data tends to lag sentiment,” said Kathy Chen, an economist at StateStreet Macro. “If businesses are pulling back and consumers are cautious, that shows up in GDP and job creation down the road.”
President Trump’s self-assessment as the architect of an historic economic start runs counter to a mounting body of evidence. With GDP already in decline and sentiment slipping, the administration faces growing pressure to stabilize trade policy and restore market confidence — or risk a deeper slowdown ahead of the 2026 midterms.
