(Note: Originally published on the Tocqueville 21 Substack)
Dear Readers,
We are now over one hundred days into the second Trump administration. At this (early!) point, the structural impact on the U.S. economy is no longer a matter of speculation: it’s procedural. From trade policy to monetary interference, Trump’s policies have unleashed institutional instability and have converged into a low-grade, slow-burn crisis with potential consequences for every American.
Given the nature of the Tocqueville 21 audience, I assume that many of you have been keeping up with these proceedings. For you, this piece will largely serve as a bird’s eye view, tying together some of the chaos to give a better perspective on where this is likely headed. However, this piece wasn’t written with our usual audience in mind. It was written because I have been asked the following question many times over the past 100 days: “What the hell is happening to the US? Are we going to be OK? How do we survive this?”
The aim of this article is to answer that question as an analyst: without sensationalism, without panic, and with a clear view of what can be done by the average person. Hence: a consumer’s guide to navigating policy-induced economic turmoil in 2025.
To be clear: This is not a moral analysis of the administration. It is, instead, a functional one: a consumer-facing strategic assessment of the most immediate and impersonal risks. Think of it less as political commentary and more as a guide to navigating the macroeconomic consequences of governance in 2025. So let me start with the most essential point, with what I told these friends, acquaintances, colleagues and mentors: Things are worse than you fear across the most impersonal dimensions. The biggest concerns for the average person are at the macro level: markets, the dollar, and the Federal Reserve.
To be blunt: This is gonna suck. We often say that the past three decades have been rough due to the Dot Com bubble, the housing bubble, the Great Recession, and Covid. The coming storm doesn’t dwarf them… but it is a completely different beast than anything in our lifetimes.
Tariffs: A Hidden Tax On Consumption
Let’s begin with what has already happened. The U.S. has imposed a 145% tariff on most Chinese imports, following the termination of the “de minimis” exemption for low-value goods. Imports from Canada and Mexico are subject to a 25% tariff, with certain exceptions for USMCA-compliant goods and specific commodities like energy products, which face a 10% tariff. A baseline 10% tariff has been applied to imports from most other countries, with higher rates for specific sectors and trading partners. All of this is massively inflationary.
The mechanics are simple, but the consequences are far more pervasive than the headlines suggest. For US consumers, tariffs mean an increase in the base price of all goods that are touched by international supply chains. To be clear, this doesn’t just mean imported goods. It means any goods that are affected by import supply.
Take apparel. With the elimination of the de minimis exemption, low-cost clothing from platforms like Shein and Temu now faces a 145% tariff, leading to significant price hikes. Domestic producers, facing less competition, may also raise prices. Consumers face higher costs across the entire product category. And because retailers operate on thin margins, many will import fewer goods, deepening the supply squeeze. This pushes prices up across the entire market.
The outcome is inflation that spreads horizontally through markets, an ambient effect. Tariffs are not a signal of strength, they’re a tax on the consumer. It doesn’t matter whether a good was produced domestically or not; because of market mechanics, you’ll be paying more for it.
Fed Up: Pennies on the Dollar
The second risk (which is arguably more serious in the long run) is the on-and-off attack on Federal Reserve independence. Trump’s flirting with the idea of removing Federal Reserve Chair Jerome Powell, despite the position’s 10-year term – which was specifically designed to insulate it from political pressure – is both arguably illegal and strategically destabilizing.
Since the onset of post-Covid inflation, Fed Chair Jerome Powell has ensured the stability of the dollar by engaging in quantitative tightening. We can argue about how effective this was (and I do, regularly); but at the end of the day, the result was a strong dollar that vouchsafed the spending power of the average American by keeping imported goods relatively affordable. Trump wants to reverse course: he wants the Fed to lower interest rates, pouring more liquidity into the economy in a misguided attempt to stimulate growth.
This sets the stage for a second layer of inflation, one driven not by policy at the border but by monetary dilution. A weaker dollar makes imports more expensive and savings less valuable. What looks like stimulus quickly becomes erosion. Domestically, a weaker dollar means less purchasing power: inflation. Internationally, a surplus of dollars drives down exchange rates: there are now more dollars for every euro, yuan, yen, etc, making imports even more expensive.
And finally, Trump has made the dollar significantly more vulnerable to movement because his policies have eroded its position as a haven for international investors. For more on that, see my recent article on Capital Matters.
Stag Party – Not So Much
So now we’ve isolated some of the most destructive consequences of Trump’s economic policy: tariff-induced inflation, political pressure on the Federal Reserve to pursue quantitative easing, and investor flight from the dollar. If we add stagnating wages, reduced business margins, and tightening credit, the result is textbook stagflation: high prices, low growth, and rising unemployment.
Stagflation isn’t a media buzzword; it’s a self-reinforcing economic nightmare scenario, a spiral that requires brutal and unconventional policy intervention from competent leadership in order to offset. Let me illustrate: When production prices rise, prices rise for consumers without increasing the margins for producers. Sales decrease, businesses struggle, then cut costs and raise prices. But cutting costs means cutting jobs, which raises unemployment, reducing sales, and thus increasing pressure on businesses, which inevitably go under. And when that happens at the same time as an inflationary spiral, you get stagflation: no economic growth paired with ever higher prices. The cycle is both impossible (in that inflation and unemployment are usually viewed as opposing forces) and self-reinforcing. Worse yet, unlike cyclical recessions, which typically bottom out within 18 to 24 months, a stagflationary spiral can take a decade to unwind. And that’s without even getting into debt, be it household or governmental, both of which are sore points in the current US economy.
Understandably, when a polity finds itself in the grip of stagflation, people panic. This feeds broader political instability, because when people don’t feel they can survive within the social contract, they either turn on their governments, or they turn on each other.
What To Focus On: Empty Shelves and Empty Tables
I would really love to say something like “this needn’t happen”; to reassure you that swift policy action could avert it. Unfortunately I can’t. While it’s true that an about-face could prevent the worst of it (and Trump’s waffling on tariffs certainly suggests that someone in the administration is managing to convince him that there’s a chance this might not be the soundest course of action), a fair amount of it is already locked in. Disruption at the ports of Seattle (however overstated online) and Los Angeles is an indicator of the grim toll of Trump’s China tariffs : the first ships affected by the tariffs have arrive with fewer goods. The supply chain disruption is already here. According to the leadership of both Target and Wal-Mart, empty shelves are in the immediate future.
Failing competent action from the administration, I anticipate things could start getting bad from an economic perspective sometime in the next six months. So what can consumers – and by that, I mean ordinary individuals living under increasingly volatile conditions – actually do? A few things come to mind:
Purchasing Strategy
- Acquire high-cost, long-shelf-life goods now
- Delay large electronics and auto purchases if possible
- Prioritize local suppliers and shorter supply chains in regular consumption
Income Resilience
- Create secondary income sources and isolate them from shocks by ensuring necessary equipment is resilient to breakdown
- Avoid new debts; favor liquidity and asset preservation
Financial Positioning
- Stay cautious on equities, particularly speculative stocks
- Monitor institutional fragility in local banking and credit systems
- Keep a close eye on the health of the local community
In fairness, I’m a geopolitical analyst. These are strategic considerations based on evolving macroeconomic conditions, not financial advice, and should be adapted to individual circumstances.
The US is not on the brink of collapse. However, President Trump is in the process of speedrunning the erosion of the economic and financial advantages that America has accumulated since the Second World War. The full array of consequences won’t arrive overnight. But they will arrive. And when the medium-term economic outlook is this uncertain, it pays to be adequately prepared.
Shane McLorrain