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CNN
—
Here we are, nearly halfway through 2025, months into the second Trump administration, and the sky hasn’t fallen. Where is the calamity all those tariff naysayers (hi!) promised?
If it feels like nothing has changed, then congratulations, you do not work in manufacturing or shipping or run a business that relies on imports.
There are a few reasons why it feels like some early tariff warnings were overblown, but the most significant is this: Trump blinked. And blinked again. And blinked a few more times.
As things stand, we’re in a watered-down state of tariff implementation, in which markets have learned to not believe the president when he makes bold declarations, and businesses are operating in survival mode — often eating the costs of Trump’s taxes on imports while they can.
For three months in a row, US factory activity has contracted, according to the Institute for Supply Management’s survey of manufacturers. The May survey, released Monday, showed tariffs were top of mind for managers across American factories. One respondent said the supply chain disruptions from tariffs alone are “rivaling that of Covid-19.”
“Government spending cuts or delays, as well as tariffs, are raising hell with businesses,” another said. “No one is willing to take on inventory risk.”
Meanwhile, the White House hasn’t notched a single substantive deal with any major trading partner since its April 2 tariff barrage began, despite promises that dozens would be rolled out over a self-imposed 90-day deadline.
It’s starting to be a bad look, given all the promises that Trump and his econ team have made about how desperate other countries would be to make a deal.
In an apparent sign of the administration’s impatience, the US Trade Representative pulled the diplomatic equivalent of a “gentle nudge to circle back on these deliverables” this week. On Tuesday, the White House confirmed that trade officials sent a letter to all US trading partners asking them to submit their best trade proposals by Wednesday. As in, today, June 4.
“USTR sent this letter to all of our trading partners just to give them a friendly reminder that the deadline is coming up,” White House press secretary Karoline Leavitt said in a news conference Tuesday.
It wasn’t clear where that deadline came from, which is consistent with the entire trade policy that seems to have been made up and modified on the fly. Reuters, which reported the letter’s existence Monday, said it suggests “an urgency within the administration to complete deals against its own tight deadline.”
A 90-day truce with China is now under strain after Trump lashed out at Beijing last week. And progress on talks with Japan and the European Union has been limited.
Financial markets, for their part, are looking for inspiration elsewhere. Stocks have been elevated by a strong earnings season while betting/praying that Trump will retreat on his most extreme trade policies.
Stocks slumped early Tuesday after the Organisation for Economic Co-operation and Development warned for the second time this year that US economic growth, in particular, is expected to take a hit from tariffs.
But by late morning, fresh data showing the labor market remains resilient helped brighten the mood on Wall Street, which (like the rest of us) has become somewhat inured to doom-y headlines. Tech stocks led the market higher, and all three major indexes closed in the black Tuesday.
Bottom line: The pain is here, even if you don’t feel it directly. And Trump’s powerful need to not be held accountable has been a kind of blessing (oddly defined) for the economy.
—CNN’s Bryan Mena contributed reporting.
