In April 2025, U.S. inflation continued its cooling trend for a third consecutive month, with consumer prices rising just 2.3% year-over-year—the slowest increase in over four years, despite the impact of some tariffs implemented under President Donald Trump. Monthly inflation also remained modest at 0.2%. Notably, grocery prices dropped 0.4%, with egg prices falling 12.7%, marking their steepest drop since 1983, although still significantly higher than a year ago.
However, economists caution that this relief may be temporary. Core inflation, which excludes food and energy, remained steady at 2.8% annually. Analysts predict inflation could rise in coming months as the lagged effects of newly implemented tariffs—which now average 18%—begin to surface. Some early signs of tariff-related price increases appeared in products like computers, sporting goods, toys, and baby items.
Businesses Grapple with Tariff Uncertainty
American businesses dependent on Chinese imports expressed cautious relief after the U.S. and China agreed to a 90-day pause on elevated tariffs, reducing them by 115 percentage points. While companies welcomed the reduction from a peak 145% rate, the remaining 30% and uncertainty beyond the truce period fueled continued anxiety. Retailers and manufacturers, especially those preparing for the holiday season, scrambled to resume or adjust shipments—fearing potential shipping bottlenecks and rising costs. Business owners, including game makers and furniture designers, emphasized that the temporary measure complicates planning and limits aggressive ordering.
In Kentucky, a traditionally Republican state, significant resistance has emerged among key business sectors to President Donald Trump’s tariff policies, according to GOP Senator Rand Paul. During a meeting with Louisville business leaders, Paul noted concerns from agriculture, the auto industry, bourbon producers, home builders, and shipping companies about the negative impact of tariffs on business operations and consumer prices.
Economic Indicators Reflect Mixed Signals
The U.S. economy contracted by 0.3% in the first quarter of 2025, marking its first decline in three years. This downturn is largely attributed to disruptions from President Donald Trump’s trade policies, particularly the imposition of massive tariffs. Businesses accelerated imports before the tariffs took effect, resulting in a 41% surge in imports—the fastest since 2020—which subtracted five percentage points from GDP growth. Consumer spending also slowed, while federal government spending dropped sharply.
Financial markets responded negatively, with the Dow Jones falling 400 points and other indexes also declining. Despite overall GDP contraction, core economic indicators, excluding volatile elements like exports and government spending, showed resilience with a 3% growth. Inflation pressures increased, evident in a rise in the Federal Reserve’s key inflation metric, fueling concerns about stagflation. The Fed faces a dilemma between supporting growth and controlling inflation. Job growth also slowed in April, suggesting potential cracks in the labor market. Economists warn that ongoing trade tensions and tariff uncertainty may further weaken the economy, raising recession risks for the second half of the year.
Public Sentiment and Political Implications
A recent AP-NORC poll indicates growing concern among Americans over President Donald Trump’s trade policies, particularly his extensive use of tariffs, as he begins his second term. Approximately half of U.S. adults believe tariffs will significantly increase prices, with another 30% expecting moderate price hikes. About 52% of respondents oppose tariffs on all imported goods, a rise from previous months, fueled largely by younger adults. Skepticism about the effectiveness of Trump’s approach remains strong, with 60% saying he has gone too far with tariffs.
While Trump supporters remain loyal, some voters have shifted allegiance due to dissatisfaction with his tariff strategy. Economic anxiety is compounded by falling stock markets, rising borrowing costs, and uncertain global trade relations, particularly with China. The poll, conducted among 1,260 adults from April 17-21, 2025, highlights a political divide, with Republicans more optimistic about the economy and Democrats expressing growing concern.