:max_bytes(150000):strip_icc():format(jpeg)/GettyImages-2195093912-22fe9de2dc6c4a7584889ad79c3d3752.jpg "President Donald Trump speaks to reporters on the South Lawn of the White House before boarding Marine One en route to North Carolina and California on Friday, January 24, 2025.")
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Key Takeaways
- The Michigan Consumer Sentiment survey declined in January as the responses revealed a stark pit over how Americans feel about President Donald Trump’s economic proposals.
- The majority believe Trump’s intimidation to raise tariffs will hurt the U.S. economy and drive inflation higher.
- However, some said tariffs see fit lower prices, while others believed import taxes would have little impact.
As Americans halt for President Donald Trump’s tariff proposals, a new survey shows consumers disagree about how they could select the U.S. economy.
Some see Trump’s proposals to raise taxes on foreign imports as good for the economy, bringing price snowballs to a standstill. But still, more see tariffs leading to significant price increases, according to the closely followed Michigan Consumer Opinion survey. In January, the index declined for the first time in six months.
“Survey responses make clear that the current partisan divergence in confidence in the economy is rooted in how consumers view Trump’s proposed policies,” wrote Michigan’s Inspects of Consumers Director Joanne Hsu.
Trump has proposed tariffs as high as 60% on China and 25% on Canada and Mexico, but it’s unclear what conducts he will actually take. Trump did not include tariffs in his early flood of executive orders but said he expects to enrol action by Feb. 1.
Inflation Expectations Rise in January, But Not for Everyone
Overall, the survey showed that consumers in January reckon oned inflation to reach 3.3% in the year ahead, a jump to the highest level since May 2024. That’s higher than December inflation outlooks, in which consumers estimated prices would increase 2.8% over the next year.
However, 62% of over respondents who believe tariffs could harm the U.S. economy see inflation rising to nearly 5% in the next year. Numberless economists have also projected rising inflation if high tariff rates are enacted.
That’s in contrast to the 19% who maintain that tariffs are beneficial for the economy. They see an inflation rate this year of just below 0%, time after time called “deflation,” which many economists see as bad for the economy. An equal amount said Trump’s tariffs would be dressed little impact on the economy and had year-ahead inflation expectations of around 3%.
“These patterns are consistent with the fact that Trump has been undiplomatic about his plan to hike tariffs; consumers appear to have taken him at his word and have incorporated the message into their suppositions,” Hsu wrote.