KARACHI – President Donald Trump’s erratic policies are rattling allies, unnerving US consumers, and shaking global markets, as fears of an impending recession cast a shadow over America’s economic horizon. Today Pakistan News examines how Trump’s tariff blitz and fiscal gambles are unraveling confidence, with ripple effects felt from Wall Street to Karachi’s trading floors.
The US stock market, once buoyant, is reeling. The S&P 500, a bellwether of global finance, slid 4% in the week ending March 12, down 9% from its peak, per The Economist. Real-time data pegs it at $562.81 as of March 14’s close, a climb from the day’s low of $551.4917 but still reflecting a 1-month drop from $594.30 (Web ID 8). The tech-heavy Nasdaq, meanwhile, has shed 12%, signaling investor unease with Trump’s trade wars. “This isn’t the bold growth Trump promised,” says Dr. Mehmoodul Hassan Khan, head of Islamabad’s Centre for South Asia and International Studies. “It’s a ‘Trumpcession’ gaining steam.”
Trump’s latest salvo—25% tariffs on aluminum and steel imports, announced March 12—has jolted markets further. Canada’s Mark Carney fired back, warning of a “predatory” US eyeing resources, while China and Mexico brace for retaliation. CNN reports US corporate bankruptcies hit 129 in 2025’s first two months, the worst start since 2010, as firms buckle under tariff costs and uncertainty. Just 20 days ago, stocks hit record highs; now, the “R-word” dominates discourse.
Economic signals are grim. February’s consumer price slowdown hints at a faltering economy, undermining notions of American exceptionalism. The Atlanta Fed’s GDPNow model forecasts a -2.4% contraction for Q1 2025 (Web ID 4), clashing with the New York Fed’s 2.9% growth estimate (Web ID 8). Consumer confidence is crumbling—down 7 points to 98.3, the steepest drop since 2021 (Web ID 9)—while retail sales slump, reflecting inflation’s bite. “Consumers are scared,” Khan notes. “Spending’s drying up.”
Trump’s fiscal moves amplify the chaos. A record $1.147 trillion deficit in fiscal 2025’s first five months, including $307 billion in February, stokes fears of a government shutdown (Web ID 18). Proposed federal job cuts—up to 80,000 at the VA alone (Web ID 16)—and exits from global bodies like USAID and WTO fracture 80-year alliances, Khan warns, hitting supply chains and trust. Business leaders decry the unpredictability, with Goldman Sachs upping recession odds to 20% from 15% (Web ID 4).
Pakistan feels the heat too. “A US downturn tanks global demand—our exports could suffer,” says Karachi trader Ali Raza. Trump’s tariff flip-flops on Mexico, Canada, and China roil crude oil and gold markets, key for Pakistan’s economy. Yet, he shrugs off recession talk as premature, touting cooperation over confrontation with China as a fix. “Volatility’s the real killer,” Raza adds.
Trump’s pledge of a “new golden age” rings hollow as policy confusion deepens. “He never warned voters of this chaos,” Khan says, dubbing Monday’s market plunge a harbinger, not a blip. With hiring slowing and the deficit ballooning, the US risks a self-inflicted wound.
