Getting a job is hard. A trade war is only going to make it harder.
An expanding tariff fight could push the US job market from meh to miserable.
Michelle Budnick, a documentary filmmaker in New York, worries that her search will get harder. The 47-year-old has been looking for full-time production work for over two years.
Budnick told Business Insider that the uncertainty created by steeper trade barriers — and the attendant specter of weaker consumer spending — will likely further reduce how much companies are willing to spend on production.
“It’s like pouring tar on top of syrup. We’re just going to drown under this,” said Budnick, referring to workers like herself in creative fields.
While it’s too soon to say precisely what economic contrails might become visible across the job market after President Donald Trump’s tariff announcement on April 2, economists told Business Insider that uncertainty will likely push some employers to curtail hiring.
“It’s kind of a frozen market,” Andrew Flowers, chief economist at Appcast, told BI. “There’s going to be even less hiring and maybe an increase in firing.”
For months, the prospect of a trade war has sat like unexploded ordnance alongside some companies’ business plans. Now that Trump is moving ahead with tariffs, including a baseline 10% levy, the impact could be profound.
“We’re starting to see maybe more feelings that, ‘Hey, this wasn’t a negotiation tactic, and that these tariffs are likely here to stay,'” Cory Stahle, an economist at the Indeed Hiring Lab, told BI.
Tepid hiring could spread
Flowers said that some of the sluggishness that has afflicted white-collar hiring for years could overtake other parts of the job market.
He said a few areas that had been strong, like healthcare, are likely to remain so. Yet industries that had been relative bright spots, including retail, transportation and warehousing, and some corners of manufacturing — one purported domestic beneficiary of tariffs — could get whacked, Flowers said.
US employers are already bringing on workers at the slowest pace in nearly a decade, Stahle said. On top of that, the number of job postings in the US has declined, he noted.
At the end of December, listings had risen to about 12% above their pre-COVID-19 levels, Stahle said. Then, from early January to the end of March, openings drifted downward to about 8.2% above their pre-pandemic levels.
Silver linings
Flowers said industries like finance, insurance, tech, and professional services, which he said have been experiencing a “white-collar recession” for two to three years, might not get hit as hard because they’re already somewhat weak and because the impact of tariffs might be indirect.
One bright spot is that overall layoffs remain low, even with broad cuts in the offing for federal workers.
However, Flowers said, the biggest impact on workers could come from lackluster hiring.
“There will be job cuts because of these tariffs, but almost proportionally more impactful is the fact that there won’t be hiring because of these tariffs,” he said.
Flowers said in a worst-case scenario, where tariff retaliation spills into a tit-for-tat global trade war, layoffs would be likely.
“The steepness of the tariff rates have spooked investors and have spooked business leaders,” Flowers said.
Any impact will be in addition to the job and spending cuts the White House is attempting to make in government agencies through the Department of Government Efficiency advisory group run by Elon Musk.
A White House spokesperson said in a statement to BI that tariffs are a “critical” part of the president’s economic agenda.
“The administration is also slashing regulations, pushing tax cuts, and unleashing American energy to drive down energy costs — policies that will also usher in economic and job growth as they did during the first Trump presidency,” the spokesperson said.
‘A self-fulfilling prophecy’
Stahle said a greater risk than the hit from tariffs could be the uncertainty they create, especially if that leads businesses to pull back on hiring and spending or pushes consumers to lock away their wallets.
“If people are feeling that it’s going to absolutely destroy things, and they act off that expectation, it could end up being a self-fulfilling prophecy,” he said, referring to the fallout from tariffs.
That precarious atmosphere was increasingly evident Friday. The March jobs report showed greater gains in US hiring than forecast, alongside downward revisions to job growth for the start of the year.
Yet, global markets plunged for a second day, with the benchmark S&P 500 index losing more than 10% in two days.
Many investors are now looking past pre-tariff data points and focusing instead on the prospects for a business environment where global trade might be hemmed in by protectionist tendencies.
“Month-old data increasingly feels like ancient history now,” Stahle said, referring to the March jobs report.
For Budnick, the filmmaker, a key concern is that tariffs could make business owners less willing to spend on the type of content she produces. Already, she’s struggled. Prior to February 2023, Budnick hadn’t gone without full-time work for a dozen years.
“You wonder what the future is going to hold,” she said. “Where is this going to go if people cannot support their families?”
Do you have a story to share about your job hunt? Contact this reporter at tparadis@businessinsider.com.