It’s Trump’s economy in the US—and warning lights are flashing

Biden, then the outgoing president, did just that in a speech last December at the Brookings Institution, saying the cost of the tariffs would eventually hit American workers and businesses.

“He seems determined to impose steep, universal tariffs on all imported goods brought into this country on the mistaken belief that foreign countries will bear the cost of those tariffs rather than the American consumer,” Biden said. “I believe this approach is a major mistake.”

And indeed, hiring is slowing sharply as President Donald Trump’s erratic and radical trade policies paralyse businesses and raise doubts about the outlook for the world’s largest economy.

US employers added just 73,000 jobs last month, the labour department reported on Friday, well short of the 115,000 expected.

Worse, revisions shaved a stunning 258,000 jobs off May and June payrolls. And the unemployment rate ticked higher to 4.2 per cent, as Americans dropped out of the labour force and the ranks of the unemployed rose by 221,000.

“A notable deterioration in US labour market conditions appears to be underway,” said Scott Anderson, chief US economist at BMO Capital Markets. ”We have been forecasting this since the tariff and trade war erupted this spring, and more restrictive immigration restrictions were put in place. Overall, this report highlights the risk of a harder landing for the labour market.”

Economists have been warning that the rift with every US trading partner will begin to appear this summer, and the Friday jobs report appeared to sound the bell.

“We’re finally in the eye of the hurricane,” said Daniel Zhao, chief economist at Glassdoor. “After months of warning signs, the July jobs report confirms that the slowdown isn’t just approaching — it’s here.”