Trump’s Tariff Gamble: No Panicans or Stagflation Fear?
These days, a new chant echoes through the White House: “No Panicans!” But as President Donald Trump’s tariff policies shake the American economy, the phrase increasingly feels like the calm before the storm. Tariff shocks, migrant deportations, and cuts in social services are together creating an economic cocktail that economists are calling stagflation—slow growth, soaring prices, and the looming threat of unemployment. Yet Trump’s loyalists insist, “Why panic?” Let’s take a closer look at this economic rollercoaster and what it really means.
The Tariff Sword: Price Shock
The Trump administration has sharpened its tariff sword to disrupt global trade. In particular, tariffs on Chinese goods are set to climb from 30% to as high as 80% by November 10. For countries like India too, tariffs have risen from 25% to 50%. While this policy carries the banner of “America First,” the real cost is being borne by U.S. consumers. From grocery aisles to car showrooms, prices are surging across the board.
Nobel Prize-winning economist Paul Krugman has warned that these tariffs may pave the way for stagflation—a situation where prices rise but the economy stagnates and jobs disappear. In a recent Substack essay, Krugman wrote, “Trump’s policies are weighing heavily on the economy. If it weren’t for the current investment boom in artificial intelligence, we might already be staring at a recession.”
Stagflation: Return of the 1970s Ghost?
In the 1970s, the oil crisis dragged America into stagflation, when long lines at gas stations and skyrocketing prices became the norm. Today, Trump’s tariffs risk awakening that ghost once again. Economist Kevin Matthews, who advises more than 400,000 investors, said, “This is a completely man-made problem. Remove the tariffs, and things could stabilise. For now, though, the policy is sending markets on a rollercoaster ride.”
From Las Vegas to New York, the first half of this year has seen steep declines in hiring and tourism. The S&P 500 index is at an 11-month low, with $5.4 trillion in market value wiped out. Goldman Sachs has slashed its 2025 GDP growth forecast to just 1%, while projecting unemployment to rise by 4.5%.
The White House’s “No Panicans” Mantra
Inside the White House, the mood is strikingly different. Trump’s aides and junior staff are rallying behind the “No Panicans” slogan, as though tariff waves were nothing more than a minor tremor. Deputy Press Secretary Harrison Fields insisted, “Inflation is under control, and growth accelerated in the second quarter. Talk of stagflation is just fear-mongering.” Economists, however, argue that pointing to sub-5% unemployment and sub-3% inflation misses the bigger picture—warning signs are clearly flashing.
Republican Restlessness: “Now We’re Worried”
Even within Trump’s own camp, unease is mounting. A former Trump administration official, speaking anonymously, admitted, “I’m surprised people are still so calm. We’re at a point where retailers feared raising prices, but now they’re forced to. That will have consequences.” Another strategist cautioned, “If this experiment fails, it will fail badly.”
According to a Reuters/Ipsos poll conducted August 13–18, 2025, only 37% of Americans support Trump’s economic policies—lower than during Joe Biden’s tenure. Behind closed doors, Republican lawmakers and strategists are growing nervous, even as they publicly echo the “No Panicans” refrain.
Impact on India: Crisis or Opportunity?
India too is feeling the shockwaves of Trump’s tariff storm. U.S. tariffs on Indian goods have risen to 50%, hitting sectors like auto parts, textiles, and pharmaceuticals. Economists estimate this could shave off 0.4% from India’s GDP growth in FY2026. Yet PHDCCI Secretary General Ranjit Mehta sees a silver lining: “Yes, MSMEs will face short-term pain, but this could open a new pathway for India in global supply chains.”
Ripples Across the World
Trump’s policies are reverberating well beyond America. China secured a 90-day tariff pause, hailed as a diplomatic win. But the imposition of a 10% tariff on BRICS nations and the threat of a 200% tariff on pharmaceuticals have only added to global uncertainty. Max Stanton, global strategist at Fidelity International, has warned that these policies could trigger a “global stagflation shock.”
The Road Ahead
Federal Reserve Chairman Jerome Powell now faces a policy dilemma: raise interest rates and risk stalling the economy further, or cut rates and risk fuelling inflation. Economist Jonathan Miller summed it up: “This is the Fed’s worst nightmare.”
What should consumers do? Kevin Matthews advises, “Build up your emergency fund, pay down high-interest debt, and stay patient with investments.” But the bigger question remains—while the White House beats the “No Panicans” drum, is this truly calm under control, or simply the silence before the storm?
Conclusion
Trump’s tariff gamble is a high-stakes bet. If it succeeds, his supporters will hail it as a victory for America First. But if it fails, the shadow of stagflation could engulf not only the United States but the global economy. For now, the “No Panicans” mantra may sound reassuring, but rising prices and uncertain jobs suggest there are real reasons to worry.
Disclaimer: The information presented in this report is based on various economic reports, expert opinions, and media sources. It is intended solely for general informational purposes and should not be considered as investment, financial, or policy advice.
Also Read
